2016-2019Bar Highlights

2016 2017 2018 2019

CC -4 Corp Code -3 Corp Code -5 Corp Code -6
IP Law -1 IP Law -3 IP Law -2 IP Law -3
SRC -1 SRC -0 SRC -3 SRC -2
FRIA -0 FRIA -3 FRIA -1 FRIA -2
Insurance -2 Insurance -3 Insurance -3 Insurance -1
Bank Laws -1 Bank Laws -0 Bank Laws -2 Bank Laws -1
Transpo -2 Transpo -2 Transpo -2 AMLA -1
Transpo -1
ECA -1
DPA -1

Corp code; nationality Corp Code; Capital in Corp Code; Doct of sep Corp Code; Trust Fund
of the corporation; reln to public utilities jurid personality from Doct
grandfather rule; doubt refers to TOCS the SH,D,O; limited liab Corp Code; Deriv Suit
as to the locus of comprising both of SH to his Corp Code; Pre-empt
beneficial ownership common and non- subscription to the Right
voting preferred shares. capital stock of the corp Corp Code; Sep & Dist
Corp Code; Business Jurid Pers
judgement rule; all corp Corp Code; Appraisal Corp code; doct of sep Corp Code; Piercing
powers and right; right to demand jur pers and limited liab Veil Corp Fiction
prerogatives vested in payment of fair value not applicable if officer Corp Code; Intra-corp
the BOD; not liable for of his shares after acted in bad faith and Dispute
mistake or errors in the dissenting from a corp fraud; officer liability a. Relp &
exercise of BJ if GF, act; must attend Nature Controv
with due care and meeting and filed Corp Code; Capital Test
prudence; derivative written dissent structure; dividends
suit to prosper must declared based on IP Law; UC
IP Law; Doct Fair Use
exhaust the intra corp Corp Code; Right to URE; prohib from IP Law; Patentable Reqt
remedies available inspect retaining surplus profits IP Law; Trademark
in excess of 100% of
Corp Code; removal of IP Law; Patentable their paid-in capital SRC; Tender Offer;
director belongs to the invention; Consent; stock; XPN expansion Any person or group
SH; ⅔ vote of the OCS XPN Compulsory lic pp, prohib by loan of person acting in
in a reg or special Govt public interest, agree’t; contingencies concert
meeting duly called for natl sec, nutri, health, 15% 200/100 one
that purpose and notice national emerg; DOH Corp code; appraisal time acq;
35% in 12 mons;
to SH of the intention of file pet for comp lic w/ right; granted by law, 51% TOES
removal; with or without Dir of Legal Affairs of cannot be removed; SRC; Insider Trading;
cause, except if the IPO to exploit the AOI amended by material non-pub info
intended to deprive the patented med; pay majority vote of the
minority SH of the RoR royalty to patentee BOD and the assent of FRIA; Def Insolvency;
must be with a cause; ⅔ OCS of SH unable to pay liab in the
amotion ousting an IP Law; Copyright; ocb or liab greater than
officer prior to the end Audiovisual works and Corp Code; Pre- assets
of his term without cinematographic works emptive right; cannot FRIA; Pet Rehab
FRIA; Stay order included
taking away right to be category incl news be offered to new in CO not app to the
a member of the corp reports , copyrightable limited group of enforcement of claims ag
investors without sureties solidarily liab w
IP Law; Copyright; doct having offered to SH of the D bec not the one subj
Corp Code; merger; no of fair use; educational record; pre-emptive of the pet for rehab;
merger if the reqt and purposes rights granted by law Also not app to
proc for merger was not crim cases e.g.
observed and no cert of FRIA; pet for rehab; IP Law; brand name is criminal ag ag
merger was issued by assets less than liab; proper subj of TM not officers under
bouncing check
the SEC pet for liquid copyright; copyright on law bec no
appropriate for more TM does not guarantee bearing in the
IP Law; confusion of liab than assets right to exclusive use; pending pet for
marks and trade names registration of a rehab
to deceive purchasers; FRIA; Commencement copyright no cond FRIA; SO only app to indiv
Dominancy vs Holistic Order and its effect; precedent for copyright debtor
test; HT entirety not Susp all actions or IS while reg of TM is a FRIA; Modes of rehab
only dominant features; proceedings; susp all cond precedent for TM - court superv vol
DT dominant features, action to enforce any infringement suit; proc
- pre-nego rehab;
infringing mark likely to judgt, attacht or other doctrine of prior use; cred hold ⅔ total
cause confusion; prov remedies ag the ownership of TM liab inc sec cred
confusion of goods; D; prohibit the D from confers right to register more 50% of the
confusion of business selling, encumbering, not registration; well- total sec claims
of the D and 50%
transfer or disposing known mark applies total unsec
SRC; investment prop except OCB and only to mark well- claims of the D
contract must be reg’d prohib D making known internationally - Convert rehab proc
in SEC; Howey Test; payment of its liab as of to liq proc
investment contract is a CO; IP Law; patentable
contract, transaction or invention; still Insurance; Def insurable
scheme xxx FRIA; Corp Code; patentable even if Interest
company has sep and patentee sold to public
Insurance; distinct jurid before registration; not Bank Laws; PDIC - split
dep to avail max dep
misrepresentation personality; company new if forms part of insurance cov.
officer is not covered by prior art and made Bank Secrecy; not incl
Insurance; cognition the rehab proceed; available to the public garnishment judgments
theory; applicant no garnishment and levy before application; e.g. crim case Bribery ag.
knowledge of the of officer’s assets not must be a person other Mayor;
insurer’s acceptance; valid. than the patentee who - disclosure
Jason clause; invented and sold to incidental to exec
consensual contract Insurance; Insurable public to be considered XPN
Interest - property; as not new - AMLC; bank
examine only
Bank laws; escalation owner vs lessee of car thru prior court
clause; de-escalation SRC; tender offer; 15% order
clause Insurance; All risk in one acq, 35% in a. Peso
insurance policy 12mons , 51% of the Savings
Transpo; last clear - subj to
TOES of a public
chance of avoiding Insurance; Double garnish
injury; not exercise insurance on life is ok company b. Dollar
diligence expected acct,
Transpo; Common SRC; registration of FCDA -
exempt
Transpo; Limited carrier presumption at securities/investment from
liability rule not apply fault unless observed contracts; not exec,
when there was a EOD; gratuitous investment contract attache
contributory carriage still liable; and
since option only
negligence; stowaway not liable as garnish;
configuration made CC but liable under granted to one not to absol
vessel unseaworthy quasi-delict public confid in
nature
Transpo; Bareboat or bec dollar
SRC; insider trading;
needed in
demise charter; owner buying and selling of economy
pro hac vice; solidarily securities while in - AMLC may also
liable possession of MNPI inquire funds and
dep if there is
Insurance; Life; prob cause they
misrepresentation; relate to unlawful
material facts known by activities under
insured time issuance the AMLA WITH
court order
of policy
- XPN: AMLC may
inquire
Insurance; Insurable WITHOUT court
interest; life insurance; order when any
insured right to change of the ff unlawful
designation of activities are
beneficiary unless involved: 1.
irrevocable; illicit Kidnap for
relations cannot be ransom 2. DDA
3. Hijacking 4.
designate as benef; no
Destructive arson
proscription illeg child 5. Murder 6. Viol
as benef wire fund trunsfer
under the AMLA
Insurance; Life and 7. Terrorism
insurance; and conspiracy to
incontestability period commit terrorism
- CA can issue ex
FRIA; petition for parte freezing of
the bank
rehab; actions or
accounts w/ prob
 proceedings against causel
the surety of the
insolvent debtor is not a Transpo; Common carrier;
subject of the stay Elements
- business
order; subjects of pet - compensation
for rehab and stay - offer to publi
order - Fortuitous event to
absolve liability
Transpo; Common 1. Unforseen occur
carriers; presumed at indep hum will
fault XPN EOD; liab 2. Event impossible
acts passengers or to foresee
strangers xpn ee 3. Impossible to
render serv in
exercise diligence of a normal manner
GFF 4. No aggrav. Of
resulting injury to
Transpo; Common creditor
carriers; presumed at
fault XPN EOD; liab ECA; Def elect doc
acts passengers r DPA; 2 right of a data subj
strangers xpn ee under DPA
exercise diligence of a - right to be
informed pers
GFF info is processed
- Right to susp,
withdraw, order
Bank laws; Law on of blocking, removal
or destruction
secrecy bank deposits;
XPN consent of
depositor or bank
inquiry order issued by
competent court; mere
suspicion of acts of
graft and bribery not
ground to lift law on
secrecy

Bank laws; unilateral

increase interest rate;
stip is a sole
potestative condition
which violates principle
of mutuality of
contracts; stip is null
and void

Answer Format
Yes/ No,
Under the law,
Here,
Hence, (optional)
SC Sample Answer

1. Yes, all of the elements of the crime of theft are present.

Under the RPC, the essential elements of theft are:
(1) The taking of a personal property;
(2) The property taken belongs to another;
(3) The taking was done without the owner’s consent;
(4) There was intent to gain; and
 (5) The taking was done without violence against or intimidation of the person
or force upon things.
The return of the thing is not an exempting or justifying circumstance.

2. No. Under the Rules, a notary public must be a member of the Philippine Bar.
Here, X’s sole credential civil service eligibility does not satisfy the requirements
to apply as a notary public.
Hence, the petition should not be granted.

3. Yes. Under the law, MeTC, MTC and MCTC have EOJ exclusive original
jurisdiction over cases of forcible entry and unlawful detainer.
Here, the RTC of Isabela has no jurisdiction over the complaint for FE.
Hence, the RTC can dismiss it outright.

--------------------------------------------------------------------------------------------------------------

MERCANTILE LAW SYLLABUS ANSWERS WITH BAR QA 08-21 ~ 50 pages

2019 BAR ANSWERS

A.1. A. Trust Fund Doctrine provides that the capital stock, property and other assets of
the corporation are regarded as equity in trust for the payment of the corporate
creditors.
The subscribed capital stock of the corporation is a trust fund for the payment of debts
of the corporation, which the creditors have the right to look for the satisfaction of their
credits and the corporation may not dissipate this and the creditors may sue SH directly
for the unpaid subscription.

B. Unfair Competition
Sec. 168 of the IPC provides that unfair competition is one where any person employs
deception or any other means contrary to good faith by which he shall pass off the
goods manufactured by him or in which he deals, or his business or services for those
of the one having established such goodwill, or who shall commit any acts calculated to
produce said result.

C. Insurable interest in property

Sec. 14 of the Insurance Code provides that an insurable interest in property may
consist in
1. An existing interest;
2. An inchoate interest founded on an existing interest;
3. An expectancy, coupled with an interest out of which the expectancy arises.
Furthermore, such insurable interest in property must exist when the insurance takes
effect, and when the loss occurs, but need not exist in the meantime.

D. Splitting of deposits
Under RA 3591 or the PDIC Act, splitting of deposit occurs whenever a deposit account
with an outstanding balance of more than P500,000 under the name a person is broken
down and transferred to two or more accounts in the name of person or entities who
have no beneficial ownership in the transferred deposits in their names within 120 days
immediately preceding or during a bank-declared holiday or immediately preceding a
closure order issued by the Monetary Board for the purpose of availing the maximum
deposit insurance coverage. This is a criminal act and the deposits are not entitled to
any insurance payment.

A.2. A. Derivative suit are those brought by one or more SH or members in the name
and on behalf of the corporation, to redress wrongs committed against it, to protect or
vindicate corporate rights whenever the officials of the corporation refuse to sue or the
ones to be sued or has control of the corporation.

B. No, the derivative suit filed by Mr. X was not proper, as Mr. X was not yet a SH when
the act complained off was performed.
For a derivative suit to prosper or valid, the following requisites must be met:
1. He was a SH or M at the time the acts or transactions subject of the action
occurred and at the time the action was filed;
2. He exerted al reasonable efforts, and alleges the same with particularity in the
complaint, to exhaust all remedies available under the AOI, by-laws, laws or rules
governing the corporation or partnership to obtain the relief desires;
3. No appraisal rights are available for the act or acts complained of;
4. The suit is not a nuisance or harassment suit; and
5. Corporation must be impleaded as a plaintiff.
Here, the first requisite is wanting. Mr. X became a SH on May 2019, the transaction
assailed by Mr. X was made May 2018, a year before he became a SH.
Hence, XXX derivative suit is not proper.

A.3. A. Pre-emptive right under Sec. 38 of the RCC is the right of all SH in stock corp to
subscribe to all issues of disposition of shares of any class, in proportion to their
respective shareholdings.

The law further provides, however, that such pre-emptive right shall not extend to
shares issued in compliance with laws requiring stock offerings or minimum stock
ownership by the public and to shares issued in GF with the approval of the SH
representing ⅔ of the OCS in exchange for property needed for corporate purposes or
in payment of previously contracted debt.

B. Sec. 38 of the RCC provides that the SH pre-emptive right may be denied by the AOI
of a stock corporation, or an amendment thereto.

Corollarily, the AOI may also limit the exercise of pre-emptive right by SH, as in the
present case.
Here, the notice sent to SH, including Ms. Z , merely reiterates the limit imposed by the
AOI.
Likewise, Ms. Z’s preemptive right may be validly waived in accordance thereto, without
an express waiver in writing.
Hence, the contention of Ms. Z is incorrect as her preemptive right is already validly
waived.

A.4. A. No, Mr. P should not be held liable as he acted not in his personal capacity, but
as an officer of a corporation, to which the law bestows a separate and distinct judicial
personality.
The SC has held that obligations incurred by them, acting as corporate agents are not
theirs but the direct accountabilities of the corporation they represent. True, solidary
liabilities may at times be incurred but only when exceptional circumstances warrant
such as, generally, in the following cases:
1. When directors and trustees or, in appropriate cases, the officers of a corporation
a. Vote for or assent to patently unlawful acts of the corporation;
b. Act in bad faith or with gross negligence in directing the corporate affairs;
c. Are guilty of conflict of interest to the prejudice of the corporation, its SH or M,
and other persons.
2. When a director or officer has consented to the issuance of watered stock or
who, having knowledge thereof, did not forthwith file with the corp secretary his
written objection thereto.
3. When the director, trustee or officer is made, by specific provision of law,
personally liable for his corporate action.

Here, none of the exceptional circs are present. As such, it should only be the
corporation, not the person acting for and on behalf, that is properly could be made
liable thereon.
Hence, Mr. P should not be held liable.

B. No, Y Inc should not be held liable due to the separate and distinct juridical
personality from that of X Corp.

The existence of interlocking directors, corporate officers and SH, which the respondent
court considered, is not enough justification to PVCF. In the absence of fraud or other
public policy considerations. But even when there is dominance over the affairs of the
subsidiary, the doctrine of PVCF applies only when such fiction is used to defeat public
convenience, justify wrong, protect fraud or defend a crime. To warrant resort to this
extraordinary remedy, there must be proof that the corporation is being used as a cloak
or cover for fraud or illegality or to work injustice. Any piercing of the corporate veil has
to be done with caution. The wrongdoing must be clearly and convincingly established.
It cannot just be presumed.

Here, while X corp and Y Inc are identically owned and its operations are controlled by
the same people, there is no showing that the veil of corporate fiction was being used to
defeat public convenience, justify wrong, protect fraud or defend crime.
Hence, the doctrine of PVCF does not apply and Y Inc should not be held liable.

A.5. Yes, the case filed is an intra-corporate dispute as the issue arose out of intra-
corporate relations.
In determining whether a dispute constitutes an intra-corporate controversy, the Court
uses 2 test, namely:
1. The relationship test, and
2. Nature of the controversy test.

An intracorp controversy is one which pertains to any of the following relationships:

1. Between the corporation, partnership,or association and the public,
2. Between the CPA and the State insofar as its franchise, permit or license to
operate is concerned;
3. Between CPA and its SH, M, or officers; and
 4. Among SH, partners or associates themselves.

Under the nature of the controversy test, the controversy must not only be rooted in the
existence of an intra-corporate relp but must as well pertain to the enforcement of the
parties correlative rights and obligations under the RCC and the internal and intra-corp
regulatory rules of the corp.

B. Yes, the case filed is still considered an intra-corp dispute since he is still considered
a SH of the company whether the consideration is fully paid or not.

To determine if a case involves an intracorp dispute xxxx two test: xx

Here, Mr. Y is thus considered a SH of the company because he is an owner of the
shares of stock thereof despite not having fully paid the full purchase price.
Hence, being a SH, xx existence of intracorp relp and nature of controversy is intracorp.

A.6. The first contention is not tenable.

Sec. 48 of the Insurance Code provides that under the incontestability clause, after a
policy of life insurance made payable upon the death of the insured shall have been in
force during the lifetime of the insured for a period of 2 years from the issuance of the
policy or last reinstatement, the insurer must make good on the policy even though the
policy was obtained through fraud, concealment or misrepresentation.
Even if Mr. H had concealed or misrepresented that he was previously diagnosed with
colon cancer, XYZ can no longer rescind the policy since it has been in force already for
3 years.

On the second contention, XYZ Insurance is liable despite the suicide of Mr. H.
Under Sec. 180-A of the Insurance Code, the insurer is liable when suicide is committed
after the policy has been enforce for a period of 2 years from the date of issue or its last
reinstatement.
Here, Mr. H committed suicide 3 years after issuance of the policy.
Hence, XYZ should be liable to the beneficiary.

A.7. No, facsimile transmittal is not considered an electronic document under the E-
Commerce Act.
Electronic document refers to information of the representation of information, data,
figures, symbols or other modes of written expression, described or however
represented, by which a right established or an obligation extinguished, or by which a
fact may be proved and affirmed, which is received, recorded, transmitted, stored,
processed, retrieved or produced electronically. RA 8792

Therefore, it is not within the scope as the subject document in a fax machine cannot be
stored, processed, retrieved or produced electronically after being received or
transmitted.

A.8. Under the doctrine of fair use, persons other than the owner of the copyright amy
use the copyrighted material in a reasonable manner without his consent, provided that
it is used for criticism, comment, news reporting and teaching, including multiple copies
for classroom use, scholarship, research and similar purposes.

B. No, the KLM Printer’s Inc.’s invocation of fair use is not proper.
The law provides 4 factors to determine whether the use made of a work in any
particular case is a fair use:
1. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit education purposes;
2. The nature of the copyrighted work;
3. The amount and substantiality of the portions used in relation to the copyrighted
work as a whole; and
4. The effect of the use upon the potential market or value of the copyrighted work.

KLM Printer Inc. did not secure the consent from the authors.
The purpose of reproduction of the books was for profit.
The nature of the books were all copyrighted textbooks.
The amount and substantiality of the work is not just a substantial reproduction but the
reproduction of the entire textbooks.
The effect of the reproduction of the textbooks would be detrimental to the potential
market of the authors of the textbooks.
Hence, KLM Printer Inc. cannot invoke the doctrine of fair use as copyright infringement
was committed.

A.9. The requisites of patentability are:

1. Novelty;
2. Inventive step; and
3. Industrial applicability.

Any technical solution of a problem in any field of human activity which is new, involves
an inventive step and is industrially applicable shall be patentable. Sec. 21 IPC.
The IPC defines the following as:
1. Novelty, that it shall not form part of a prior art;
2. Inventive step, that it is not obvious to a person skilled in the art at the time of the
filing date or priority date of the application for the patent, and
3. Industrial applicability, that the invention can be produced and used in any
industry.

B. No, it is not patentable for lack of the requisite inventive step.

An invention involves an inventive step if, having regard to prior art, it is not obvious to a
person skilled in the art at the time of the filing date or priority date of the application
claiming the invention. Sec. 26 IPC
Discovering a new use or form of patented products does not amount to an inventive
step since it is not unobvious to persons skilled in the art as proven by the previous
patent registration of Marvelopis. An exception is when there is a substantial
improvement such as addition of a new active ingredient, which is not present in this
case.

A.10. Yes, W Hotels Inc’s defense against the petition for cancellation of trademark is
tenable.
The SC has held that the use of a registered mark representing the owner’s goods or
services by means of an interactive website may constitute proof of actual use that is
sufficient to maintain the registration of the same. Since the internet has turned the
world into one vast marketplace, the owner of a registered mark is clearly entitled to
generate and further strengthen his commercial goodwill by actively marketing and
commercially transacting his wares or services throughout multiple platforms on the
internet.

However, the mere exhibition of goods or services over the internet, without more, is not
enough to constitute actual use. Xxx.. transacted or at the very least intentionally
targeted customers of a particular jurisdiction in order to be considered as having the
trademark in the ordinary course of his trade in that country. A showing of an actual
commercial link to the country is therefore imperative. As the IP Code expressly
requires, the use of the mark must be within the Ph.

These facts and circs show that W Hotel Inc’s use of its W mark through its interactive
website is intended to produce a discernible commercial effect or activity within the Ph,
or at the very least, seeks to establish commercial interaction with local consumers.
Accordingly, W Hotel’s use of the W mark in its reservation services through its website
constitutes use of the mark sufficient to keep its registration in force.

B.1. A. Under FRIA, insolvency refers to the financial condition of a debtor that is
generally unable to pay its or his liabilities as they fall due in the ordinary course of
business or has liabilities that are greater than its or his assets.
W Medical cannot be considered as insolvent because to be insolvent under FRIA,
liabilities must be greater than assets.
Here, W Medical Inc assets are more than its liabilities.
Moreover, nothing in the facts state that it foresees its inability to pay its obligations for
more than one year.
Hence, it cannot be considered as insolvent.

B. No, assuming that W Medical is considered “insolvent”, the petition for suspension of
payments under S94 of FRIA may only be filed by an individual debtor who has
sufficient properties to cover all his debts but foresees the impossibility of meeting his
debts when they respectively fall due.
Here, if W Medical Inc is insolvent, then he has no sufficient properties to cover all his
debts because his liabilities are greater than his assets.
Hence, W Medial cannot file a petition for suspension of payments under FRIA.

C. Under FRIA, W Medical Inc, may opt to avail (1) court supervised voluntary
proceedings or (2) pre-negotiated rehabilitation.
W Medical Inc, may avail the former should it foresee the impossibility of meeting debts
when they respectively fall due.
W Medical Inc, may likewise file a verified petition with the court of the approval of a
pre-negotiated Rehabilitation Plan, which has been endorsed or approved by creditors
holding at least ⅔ of the total liabilities of the debtor, including secured creditors holding
more than 50% of the total secured claims of the debtor and unsecured creditors
holding more than 50% of the total unsecured claims of the debtor.

D. Yes, it is possible for the rehabilitation proceedings to be converted into one for
liquidation.
Under Se. 25 of FRIA, when the debtor is insolvent and there is no substantial likelihood
for a successful rehabilitation and there is failure of rehab, the court may convert the
proceedings to liquidation proceedings.
Hence, a petition for rehab may be converted into a liquidation proceedings.

B.2. A. No, the case against Z Insurance Co should not be suspended despite the
commencement order issued to EFG Inc.
Under Sec.18c of FRIA, the stay order, which is included in the commencement order,
shall not apply to the enforcement of claims against sureties solidarily liable with the
debtor, for the simple reason that it is not one subject of the petition for rehab.
Hence, xxx.

B. The criminal case against Mr. P is not suspended by the commencement order issue
to EFG Inc.
Under Sec. 18 of FRIA, any criminal action against an individual debtor or owner,
partner, director or officer of the debtor shall not be affected by any proceeding
commenced.
Here, the prosecution of the officers has no bearing on the pending rehab of the
insolvent debtor.
Hence, xxx

B.3. 2 rights of a data subject under the Data Privacy Act

The data subject has the right to:
1. Be informed whether personal information pertaining to him or her shall be, are
being or have been processed; and
2. Suspend, withdraw or order the blocking, removal or destruction of his or her
personal information from the personal information controller’s filing system upon
discovery and substantial proof that the personal information are incomplete,
outdated, false or unlawfully obtained, used for unauth purposes or are no longer
necessary for the purposes for which they were collected.

B.4. No, XYZ Inc is not required to conduct a tender offer.

Under Sec. 19 of the SRC or RA 8799 on Tender Offers and SEC Rules, any person or
group of persons acting in concert who intends to
(1) acquire at least 15% of any class of any equity security of a corporation with assets
of at least Fifty Million Pesos, P50,000,000, and having 200 or more SH with at least
100 shares each or
(2) acquire at least 35% of such equity over a period of 12 months,
(3) acquire less than 35% but results in ownership of over 51% of the total outstanding
equity securities of the public company
shall make a tender offer to SH by filing with the Commission a declaration to that
effect; and furnish the issuer, a statement containing such of the information required in
Sec. 17 of this Code as the Commission may prescribe.

Such person or group of persons shall publish all requests or invitations for tender, or
materials making a tender offer or requesting or inviting letters of such security.

Copies of any additional material soliciting or requesting such tender offers subsequent
to the initial solicitation or request shall contain such information as the Commission
may prescribe and shall be filed with the Commission and sent to the issuer not later
than the time copies of such materials are first published or sent or given to security
holders.

Here, the acquisition of the 12% shareholding does not meet the 35% threshold nor
does it result in ownership of over 51% of the TOES of ABC Corp.
Hence, XYZ Inc is not required to make a tender offer.

B.5. A. Yes, the information of the P5 Billion construction contract is a material

nonpublic.
Under Subsection 27.2 of SRC, an information is material nonpublic if:
1. It has not been generally disclosed to the public and would likely to affect market
price of the security after being disseminated to the public and the lapse of a
reasonable time for the market to absorb the information; or
2. Would be considered by a reasonable person important under the circs in
determining his course of action whether to buy, sell or hold a security.
Here, the information of the P5 Billion construction contract acquired by xxxx is not gen.
Disclosed xxx affects market price xxx.
Hence, it is considered material nonpublic information in insider trading.

B. Yes, Mr. P and B are both liable for insider trading.

Subsection 27.1 of the SRC provides that it shall be unlawful for an insider to sell or buy
a security of the issuer, while in possession of material information with respect to the
issuer or the security that it is not generally available to the public. Further, Subsection
27.1 provides that it shall be unlawful for any insider to communicate material nonpublic
information about the issue or the security to any person who, by virtue of the
communication, becomes an insider as defined in Subsection 3.8, where the insider
communicating the information knows or has reason to believe that such person will
likely buy or sell a security of the issuer whole in possession of such information.

In the present case, Mr. P as pres of JKL, is deemed as an insider that is prohibited by
law to buy a security of the issuer, JKL, while in possession of material nonpublic
information with respect to the P5 Billion construction contract. As to Mr. B, by virtue of
the communication made by Mr. P to him, he also becomes an insider as defined in
Subsection 3.8.
Hence, Mr. P and B are liable for insider trading as prohibited by law when they bought
shares of the JKL while having knowledge of the said material nonpublic information.

B.6. Mayor J’s peso saving account with Bank P may be subject to garnishment.
The SC has held that the prohibition against examination of or inquiry into deposit under
RA 1405 of the Bank Secrecy Law does not preclude being garnished to insure
satisfaction of judgment.

Further, the SC also held that the disclosure of deposits to satisfy the writ of
garnishment issued by the court is not a violation of deposit secrecy since their
disclosure is purely incidental to the execution process.

However, Mayor J’s US Dollar account in Bank D may not be subject to garnishment.
Sec. 8 of the Foreign Currency Deposit Act provides that all foreign currency deposits
authorized under this Act, as amended by PD no. 1035, are hereby declared as and
considered of an absolutely confidential nature.
These forein currency deposits shall be exempt from attachment, garnishment, or any
other order or process of any court, legislative body, government agency or any
administrative body whatsoever.

GENERAL PRINCIPLES OF MERCANTILE LAW

ENGAGING IN COMMERCIAL TRANSACTION

2009. Yes,even if the grocery store has yet to be established, Cecilio already habitually
engaged in commerce, when per his instruction the members of his family contacted
more than 80% the residents of the subdivision where they reside.
Under Art. 3 of the Code of Commerce, “legal presumption of habitually engaging in
commerce shall exist from the moment the person who intends to engage therein
announces through circulars, newspapers, handbills, posters exhibited to the public, or
any other manner whatsoever an establishment which has for its object some
commercial operation”. Text messages may qualify to be equivalent to electronic
documents. There is an intent to engage in commerce or trade.

I. INSURANCE

A. Concept of insurance
B. Elements of an insurance contract
C. Characteristics and nature of insurance contracts
D. Classes
1. Marine
2. Fire
3. Casualty
4. Suretyship
5. Life
6. Microinsurance
7. Compulsory motor vehicle liability insurance
8. Compulsory insurance coverage for agency-hired workers
E. Variable contracts
F. Insurable interest
1. In life/health
2. In property
3. Double insurance and over insurance
4. Multiple or several interests on same property
G. Perfection of the contract of insurance
1. Offer and acceptance/consensuality
a. Delay in acceptance
b. Delivery of policy
2. Premium payment
3. Non-default options in life insurance
4. Reinstatement of a lapsed policy of life insurance
5. Refund of premiums
H. Rescission of insurance contracts
1. Concealment
2. Misrepresentation/omissions
3. Breach of warranties
I. Claims settlement and subrogation
1. Notice and proof of loss
2. Guidelines on claims settlement
a. Unfair claims settlement; sanctions
b. Prescription of action
c. Subrogation

J. Business of insurance; requirements

K. Insurance Commissioner and its powers

GENERAL PRINCIPLES

PAYMENT OF PREMIUM
2015. B. As a GR, the insurance policy is not valid and binding, unless the premium
thereof has been paid.
This is the cash and carry rule under the Insurance Code. Premium is the consideration
for the undertaking of the insurer to indemnify the insured against a specified peril.
There are exceptions, however, one of them is when there is an agreement allowing the
insurer to pay the premium in - installments and partial payment has been made at the
time of the loss.

2014. No, RN Insurance is wrong.

Here, Danny procured insurance on his life on Sept 25, 2013, with his wife Tina as
beneficiary, and that on the same day of Sept 25, 2013, he issued an undated check to
RN for the full amount of the premium. Since the undated check was issued to RN on
Sept 25, it will be considered dated as of the same day pursuant to Sec. 17 of NIL.
The facts also show that RN Insurance issued the policy on Danny’s life on October 1,
2013 and that Danny died in an accident on October 5, 2013.

2013. St. Peter Manufacturing Co is entitled to recover for the loss from stable
Insurance Company.
Stable Insurance Company granted a credit term to pay the premiums.
This is not against the law, because the standing business practice of allowing St. Peter
Manufacturing Co to pay the premiums 60-90 days, was relied upon in good faith by
SPMC. Stable Insurance company is in estoppel.

2006. Yes, when insured and insurer have agreed to the payment of the premium by
installments and partial payment has been made at the time of loss, then the insurer
becomes liable. But the latter has the right to deduct the amount of unpaid premium
from the insurance proceeds.

2010. The insurer is not liable under the insurance policy.

Under Ar. 1249 of the Civil Code, the delivery of a check produces the effect of payment
only when it is encashed.
The loss occurred on April 5, 2010. When the check was deposited, it was returned on
April 10, 2010, for insufficiency of funds. The check was honored only after Enrique
deposited additional funds with the bank.
Hence, it did not produce the effect of payment.
2007. Payment by means of a check which was accepted by the insurer, bearing a date
prior to the loss, would be sufficient. The subsequent effects of encashment retroact to
the date of the check.
Yes, recovery under the insurance contract is allowed if the cause of the loss was either
the proximate or the immediate cause as long as an excepted peril, if any was not the
proximate cause of the loss.

Yes, mere negligence on the part of the insured will not prevent recovery under the
insurance policy. The law merely prevents recovery when the cause of loss is the willful
act of the insured, alone or in connivance with others. S87 ICP

INSURABLE INTERESTS

2019. Insurable interest in property

S14 ICP provides that an insurable interest in property may consist in
a. An existing interest. E.g. owner
b. An inchoate interest founded on an existing interest. E.g. lessee
c. An expectancy, coupled with an interest out of which the expectancy arises.
Furthermore, such an insurable interest in property must exist when the insurance takes
effect, and when the loss occurs, but need not exist in the meantime.

2018. Insurance; Insurable interest; life insurance; insured right to change designation
of beneficiary unless irrevocable; illicit relations cannot be designate as benef; no
proscription illeg child as benef
A. Yang is correct. The insured shall have the right to change the beneficiary he
designated in the policy unless he has expressly waived this right in the policy. There is
nothing in the life insurance policy taken by Yang which indicates that the designation of
Ying is irrevocable. As such, it is deemed to be irrevocable.

B. Vessel has no insurable interest on the life of Yin because she cannot be lawfully
designated as beneficiary in the life insurance. These include persons in illicit relations
as in the case of Yin and Vessel. Vinsel, however, has an insurable interest in the life of
Yin. There is no proscription in naming an illegitimate child as beneficiary.

2017. A. Insurable Interest.

There is insurable interest in property when he derives a benefit from its existence or
would suffer a loss from its destruction, termination or injury by the happening of the
event insured against it.

B. Seth and Sean have separate insurable interests. Seth’s insurable interest is his
legal and/or equitable interests over the vehicle as an owner while Sean’s insurable
interest is the safety of the vehicle which may become the basis of liability in case of
loss or damage to the vehicle.

2015. Yes, Novette has an insurable interest in the goods. The contract of sale was
already perfected and Novette acquired interest thereon, although the goods have yet to
be delivered.
2014. Yes, Carlo can claim the insurance benefit. He had an insurable interest in
Bianca's life under S10b ICP as the problem states that Carlo “always depended on
Bianca both emotionally and financially”.
The insurable interest upon the life of another under the aforesaid provision need not be
based on kinship or legal obligation to give support. The fact that their marriage may be
void is irrelevant.

2014. General Creditor on debtor’s property - not considered insurable

ASSIGNMENT OF POLICY

2009. Ciriaco is entitled to receive the proceeds of the insurance policy.

The stipulation that the policy is deemed assigned and transferred to SBS is void,
because SBC has no insurable interest in the merchandise of Ciriaco,

PERFECTION OF INSURANCE CONTRACTS

2009. No, by approving the application of Quirino who disclosed that he was already 80
years old, ALAC waived the age requirement.
ALAC is not stopped from raising such a defense of age of the insured.

The issuance of a cover note by ALAC resulted in the perfection of the contract of
insurance. In that case, it is only because there is a delay in the insurance of the policy
that the cover notes were issued. The cover note is a receipt whereby the company
agrees to insure the insured for 60 days pending the issuance of a regular policy.
No separate premium is to be paid on a cover note. It is not a separate policy but is
integrated in the regular policy to be subsequently issued.

MARITIME INSURANCE

ALL RISK INSURANCE POLICY

2017. All risk insurance policy

The insurance claim is sustainable.
An all risk insurance policy covers all causes of conceivable loss or damage, except as
otherwise excluded in the policy or due to fraud or intentional misconduct on the part of
the insured. Since there was no stipulation as to what losses are excluded from the
coverage, the insured can recover.

SUBROGATION

2014. I will decide the case in favor of ELP Insurance.

Even if CGM Inc is not privy to the contract between FCL and ELP Insurance, it is still
liable for the loss of the subject cargo.
Art. 2207 of the Civil Code provides that if the plaintiff’s property has been insure and
he has received indemnity from the insurance company for injury or loss arising out of
the wrong or breach of contract complained of, the insurance company shall be
subrogated to the rights of the insured against the wrong-doer or the person who has
violated the contract, which in this case is CGM. Since ELP Insurance is subrogated to
the rights of FCL Corporation to the extent of the amount it paid to the latter under the
marine insurance contract, it has the right to seek reimbursement from CGM Inc, for
breach of contract and/or tort.

LIFE INSURANCE

2017. Double insurance on life is ok

Life insurance does not prohibit double insurance. Insurable interest in life is unlimited.

MISREPRESENTATION
2018. Life Insurance; misrepresentation; material facts known by insured time issuance
of policy
A. The insurer cannot raise the issue of concealment because only material facts known
to the insured at the time of the issuance of the policy should be disclosed to the
insurer. S28 ICP. Yate’s previous cancer diagnosis is no longer a material fact at the
time she procured the policy.

2016. Insurance; misrepresentation

A. No, the beneficiary of X is not entitled to the proceeds of the life insurance.
The hypertension of X is a material fact that should have been disclosed to the insurer.
The concealment of such material fact entitles the insurer to rescind the insurance
policy.

B. It is still material information. It is settled that the insured cannot recover even though
the material fact not disclosed is not the cause of the loss.
If the insured knows that the insurer is hypertensive, they will not issue an insurance
policy.

2013. The insurance company correctly rescinded the policy because of concealment,
S27 ICP.
Benny did not disclose that he was suffering from diabetes etc.. The concealment is
material because these are serious ailments. Benny died less than 2 years from the
date of the issuance of the policy.

INCONTESTABILITY PERIOD

2019. The first contention is not tenable.

S48 ICP provides that under the incontestability clause, after a policy of life insurance
made payable upon the death of the insured shall have been in force during the lifetime
of the insured for a period of two years from the issuance of the policy or last
reinstatement, the insurer must make good on the policy even though the policy was
obtained through fraud, concealment or misrepresentation. Even if Mr. H had concealed
or misrepresented that he was previously diagnosed with colon cancer, XYZ can no
longer rescind the policy since it has been in force already for 3 years.

On the second contention, XYZ Insurance is liable despite the suicide of Mr. H.
Under S180A ICP, the insurer is liable when suicide is committed after the policy has
already been in force for 2 years. Here, 3 years. Hence, liable.

2018. Insurance; Life insurance; incontestability period

Yes, the insurer is liable.
The rule is that the insurer in life insurance is liable in case of suicide only when it is
committed after the policy has been in force for a period of 2 years from date of issue or
reinstatement.
The rule, however, admits of an exception so that when suicide is committed in the state
of insanity, it shall be compensable regardless of the the date of commission. S183 ICP
Here, Yate was diagnosed with a psychotic tendency that graduated into extreme
despondency.
Hence, even though Yate committed suicide 36 months from issuance of the policy, the
insurer is liable.

2014. A. Yes, Sotero validly designmate her niece as beneficiary. The same is not
prohibited under the Insurance Code or any other law pertinent to the problem.

B. Yes, the incontestability period applies even in cases of fraud as claimed here.
Note that the findings are those of the insurer and these were made in an investigation
conducted unilaterally by the insurer more than 3 years after the policy was taken out by
Sotero. These findings may very well be dismissed as self-serving considering the
incontestability clause set out in S48 ICP.

COGNITION THEORY

2016.Insurance; cognition theory; applicant no knowledge of the insurer’s acceptance;

Jason clause; consensual contract
Jason cannot recover on the insurance policy since he had no knowledge of the
insurer’s acceptance of his application before his house was razed by fire.

An insurance contract is a consensual contract and is therefore perfected the moment

there is a meeting of minds with respect to the object and the cause or consideration.
What is being followed in insurance contracts is what is known as the cognition theory.
The SC has held that the contract for a life annuity was not perfected because it has not
been proved satisfactorily that the acceptance of the application ever came to the
knowledge of the applicant.

TRANSFER OF THE THING INSURED

2014. P 29

2014. Jack Insurance is not correct.

Ric Silat was merely given physical possession of the car. He did not have juridical
possession over the same. It is also apparent that the taking by Silat of the car of Jess
is without the consent or authority of the latter.
Hence, the act of Silat in depriving Jess of his car, soon after the transfer of physical
possession of the same to him, constitutes theft under the insurance policy that is
compensable.

2014. Matino Insurance is not correct.

Under the insurance policy, the loss of the motor vehicle is not excluded as the loss was
due to theft, not malicious damage. The malicious damage clause under the policy is
not applicable but rather the theft clause.
Hence, the provision under the policy that the company shall not be liable for any
malicious damage caused by the insured.. Xxx is not applicable.

II. PRE-NEED

A. Definition
1. Pre-need plans
2. Pre-need company
B. Registration of pre-need plans
C. Licensing of sales counselor and general agent
D. Default and termination
E. Claims settlement

III. TRANSPORTATION LAW

A. COMMON CARRIERS
1. Diligence required of common carriers
2. Liabilities of common carriers
3. Classification of transport network vehicle services and transport
network companies

2019. A. LMN could be considered a common carrier. (business.. Carrying for

compensation)
Under A1732 of the Civil Code provides that common carriers are pcfa persons,
corporations, firms or associations engaged in the business of carrying or transporting
passengers og goods or both, by lwa for compensation, offering their services to the
public.

The above provision makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such carrying
only as an ancillary activity, in local idiom, as a sideline, A1732 also carefully avoids
making any distinction between a person or enterprise offering transportation service on
a regular or scheduled basis and one offering such service on an occasional, episodic
or unscheduled basis.
Neither does A1732 distinguish between a carrier offering its services to the general
public and one who offers services only to a narrow segment of the general population.

In a similar case, the SC ruled that its ferry services are so intertwined with its main
business as to be properly considered ancillary thereto.
The constancy of respondent’s ferry services in its resort operations is underscored by it
having its own Coco Beach boats. And the tour packages it offers, which include the
ferry services, may be availed of by anyone who can afford to pay the same. These
services are thus available to the public.

Thus, applying the doctrine in this case, LMN is considered a common carrier.

B. No, LMN could not use the defense of a fortuitous event to be absolved of liability.
For the defense of fortuitous events to prosper the following elements must be present:
1. The cause of the unforeseen and unexpected occurrence, or the failure of the
debtors to comply with their obligations, must have been independent of human
will;
 2. The event that constituted the caso fortuito must have been impossible to
foresee or, if foreseeable, impossible to avoid;
3. The occurrence must have been such as to render it impossible for the debtors to
fulfill their obligation in a normal manner; and
4. The obligor must have been free from any participation in the aggravation of the
resulting injury to the creditor.

To fully free a CC from any liability, the fortuitous event must have been the proximate
and only cause of the loss. And it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the fortuitous event.
The occurrence of the incident could have been expected from the storm forecasts,
released the morning of the incident.
Hence, the event was not impossible to foresee and was not impossible to avoid, had
LMN prioritized the safety of its guests.

2018. Transpo; Common carriers; presumed at fault XPN EOD; liab acts passengers r
strangers xpn ee exercise diligence of a GFF
A. Yes, by express provision of law, in case of death or injuries to passengers, CC are
presumed to have been at fault or to have acted negligently unless they proved that
they exercised extraordinary diligence. A1756 NCC

B. A CC is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of a very cautious person with a due regard for all
the circs or simply put, with extraordinary diligence. A1755 NCC

C. My answer will be different. A CC is responsible for death or injuries caused by willful

acts of other passengers or strangers, only if the CC employees through the exercise of
the diligence of a GFF could have prevented the act. A1763 NCC

2017. Common carrier presumption at fault unless observed EOD; gratuitous carriage
still liable; stowaway not liable as CC but liable under quasi-delict
In so far as Aurelio is concerned, WTC is liable for his injuries considering CC like WTC
are presumed to have been at fault, unless it was proven that it observed extraordinary
diligence.
However, insofar as Jerome is concerned where there was gratuitous carriage, if there
was a stipulation limiting WTC’s liability for negligence, that is valid but not for gross
negligence. Thus, if there was no stipulation, then the carrier’s liability is the same as
that of Aurelio’s, the paying passenger.
However, for a stowaway like Florencio, he assumes all the risk attendant to the trip.
The CC then is not liable except when the driver drove negligently. They may be held
liable under quasi-delict even if Florencio was a stowaway passenger.

2016. Transpo; last clear chance of avoiding injury; not exercise diligence expected
PNR should be held liable. PNR had the last clear chance of avoiding the injury but did
not exercise the diligence expected of it under the circs.

ALT:
I will rule in favor of PNR.
The doctrine of last clear chance states that where both parties are negligent but the
negligent act of one is appreciably later than that of the other, or where it is impossible
to determine whose fault or negligence caused the loss, the one who had the last clear
opportunity to avoid the loss but failed to do so, is chargeable with the loss. Stated
differently, the antecedent negligence of the plaintiff does not preclude him from
recovering damages caused by the supervening negligence of the defendant, who had
the last fair chance to prevent the impending harm by the exercise of due diligence.

We do not apply the doctrine of last clear chance to the present case. It cannot be
expected for a train to avoid the jeepney since it can only go one way trailing the
railings.
Moreover, the railroad is exclusive to the PNR and the jeepney should not have stopped
right in the railroad. The jeepney failed to observe extraordinary diligence.

2015. Yes CC are liable to injuries to passengers even if the carriers observed ordinary
diligence and care, because the obligation imposed upon them by law, is to exercise
extraordinary diligence. CC are bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious person,
with due regard for all the circs. A1755 NCC

B. VIGILANCE OVER GOODS

1. Exempting causes
a. Requirement of absence of negligence
b. Absence of delay
c. Due diligence to prevent or lessen the loss
2. Contributory negligence
3. Duration of liability
a. Delivery of goods to common carrier
b. Actual or constructive delivery
c. Temporary unloading or storage
4. Stipulation for limitation of liability
a. Void stipulations
b. Limitation of liability to fixed amount
c. Limitation of liability in absence of declaration of greater value
5. Liability for baggage of passengers
a. Checked-in baggage
b. Baggage in possession of passengers

C. SAFETY OF PASSENGERS
1. Void stipulations
2. Duration of liability
a. Waiting for carrier or boarding of carrier
b. Arrival at destination
3. Liability for acts of others
a. Employees
b. Other passengers and strangers
4. Liability for delay in commencement of voyage
5. Liability for defects in equipment and facilities
6. Extent of liability for damages

D. BILL OF LADING
1. Three-fold character
2. Delivery of goods
a. Period for delivery
b. Delivery without surrender of bill of lading
c. Refusal of consignee to take delivery
3. Period for filing claims
4. Period for filing actions
5. Effects of stipulations

E. MARITIME COMMERCE
1. Charter parties
a. Bareboat/demise charter
b. Time charter
c. Voyage/trip charter

CHARTER PARTY
2017. Bareboat or demise charter; owner pro hac vice; solidarily liable
Considering that Go-Green was the one who operated the vessel with its own crew,
what was taken then by the parties was a bareboat or demise charter.
In a charter by demise or bareboat charter, the whole vessel is let to the charterer with a
transfer to him of its entire command and possession and consequent control over its
navigation, including the master and the crew, who are his servants. The charterer
mans the vessel with his own people and becomes, in effect, the owner for the voyage
or service stipulated and hence liable for the damages or loss sustained by the goods
transported. The concept of owner pro hac vice applies making Go-Green solidarily
liable for the injuries.

2. Liability of shipowners and shipping agents

a. Liability for acts of captain
b. Exceptions to limited liability

LIMITED LIABILITY RULE

2016. Transpo; Limited liability rule not apply when there was a contributory negligence;
configuration made vessel unseaworthy
The limited liability rule will not apply in this case because there was contributory
negligence on the part of the SO. The configuration of the bulkhead of the deck of the
ship to accommodate more passengers made the vessel unseaworthy.

3. Accidents and damages in maritime commerce

a. General average
b. Collisions and allisions
4. Carriage of Goods by Sea Act
a. Application
b. Notice of loss or damage
c. Period of prescription

2010. The 1 year prescriptive period in COGSA applies only in case the goods were not
delivered or were delivered in a damaged or deteriorated condition. It does not apply to
damages as a result of delay in the delivery of the goods.
Here, the prescription of the action is governed by A11444 NCC which provides for a
prescriptive period of 10 years in case of actions based on a written contract.

d. Limitation of liability

CARRIAGE OF GOODS BY SEA ACT

2014. NA Insurance is correct. The COGSA applies only to carriers or ships.
A carrier, under S1 COGSA, includes the owner or the charterer who enters into a
contract of carriage with a shipper, while a ship is defined under S1d as any vessel
used for COGSA. The COGSA does not apply to ATI as it is neither a carrier nor a ship,
much less a shipper.
It is simply an arrastre operator. Moreover, the COGSA does not mention that an
arrastre operator may invoke the prescriptive period of 1 year.
Hence, it does not cover the arrastre operator.

F. PUBLIC SERVICE ACT

1. Definition of public utility
2. Necessity for certificate of public convenience
a. Requisites
i. Citizenship /
ii. Promotion of public interests
iii. Financial capability
b. Prior operator rule
i. Meaning
ii. Exceptions
iii. Ruinous competition
3. Fixing of rate
a. Rate of return
b. Exclusion of income tax as expense
4. Unlawful arrangements
a. Boundary system
b. Kabit system
5. Approval of sale, encumbrance or lease of property

2017. Capital in reln to public utilities means both the voting shares and the TOCS
The term capital in relation to public utilities under S11 AXII of the Constitution:
The SC has held that the term capital means both the voting shares and the total
outstanding capital stock. vs tocs

G. THE WARSAW CONVENTION

1. Applicability
2. Limitation of liability
a. Liability to passengers
b. Liability for checked baggage
c. Liability for hand-carried baggage
3. Willful misconduct

IV. BUSINESS ORGANIZATIONS

A. PARTNERSHIPS
1. General provisions
a. Definition
b. Elements
c. Characteristics
d. Rules to determine existence
e. Partnership term
f. Partnership by estoppel
g. Partnership as distinguished from joint venture
h. Professional partnership
i. Management
2. Rights and obligations of partnership and partners
a. Rights and obligations of the partnership
b. Obligations of partners among themselves
c. Obligations of partnership/partners to third persons
3. Dissolution and winding up
4. Limited Partnership

B. CORPORATIONS
1. Definition of corporation
2. Classes of corporations
3. Nationality of corporations
a. Control test
b. Grandfather rule

NATIONALITY OF THE CORPORATION

2016. Corp code; nationality of the corporation; grandfather rule; doubt as to the locus
of beneficial ownership
The grandfather rule should be applied.
The SC has held that even though on paper, the capital shareholding in a mining
company is 60% owned by Filipinos and 40% by foreigners, if there is doubt as to the
locus of beneficial ownership and control, the GFR should apply.
Here, B corporation, a Chinese corporation, practically exercises control over O, P and
Q corporations.
Such circumstances create a doubt as to where control and beneficial ownership reside
that warrants the application of the grandfather rule.

2015. A. The appointment of a distributor in the Ph is not sufficient to constitute doing

business unless it is under the full control of the foreign corporation.
If the distributor is an independent entity doing business for its own name and account,
the latter cannot be considered as doing business.

B. yes ABC Corp is a Ph national, as long as it is registered as doing business in the Ph

under the Corporation Code.

4. Corporate juridical personality

a. Doctrine of separate juridical personality
i. Liability for tort and crimes
ii. Recovery of damages
b. Doctrine of piercing the corporate veil
i. Grounds for application of doctrine
ii. Test in determining applicability

2019. A. No, Mr. P should not be held liable as he acted not in his personal capacity,
but as an officer of a corporation, to which the law bestows a separate and distinct
juridical personality.
THe SC has held that obligations incurred by corporate agents, are not theirs but the
direct accountabilities of the corporation they represent.
True solidary liabilities may at times be incurred but only when exceptional
circumstances warrant such as, generally, in the following cases:
1. When directors and trustees or, in appropriate cases, the officers of a
corporation:
a. Vote for or assent to patently unlawful acts of the corporation;
b. Act in bad faith or with gross negligence in directing the corporate affairs;
c. Are guilty of conflict of interest to the prejudice of the corporation, its SH or
M, and other persons.
2. When a D or O has consented to the issuance of watered stock or who, having
knowledge thereof, did not forthwith file with the corporate secretary his written
objection thereto.
3. When the DTO has contractually agreed or stipulated to hold himself personally
and solidarily liable with the Corporation.
4. When the DTO is made, by specific provision of law, personally liable for his
corporate action.

Here, none of the exceptional circs are present. As such, it should only be the
corporation, not the person acting for and on its behalf, that properly could be made
liable thereon.

B. No, Y Inc should not be held liable due to the SDJP from that of X Corp.
The existence of interlocking directors, corporate officers and shareholders, which the
respondent court considered, is not enough justification to pierce the veil of corporate
fiction, in the absence of fraud or other public policy considerations. But even when
there is dominance over the affairs of the subsidiary, the doctrine of piercing the veil of
corporate fiction applies only when such fiction is used to defeat public convenience,
justify wrong, protect fraud or defend crime.
To warrant resort to this extraordinary remedy, there must be proof that the corporation
is being used as a cloak or cover for fraud or illegality, or to work injustice.
Any piercing of the corporate veil has to be done with caution. The wrongdoing must be
clearly and convincingly established. It cannot just be presumed.
Here, while X Corp and Y Inc are identically owned and its operations are controlled by
the same people, there is no showing that the veil of corp fiction was being used to
defeat public convenience, justify wrong, protect fraud or defend crime.
Hence, the doctrine of piercing the corporate veil does not apply and Y should not be
held liable.

2014. The RTC is wrong.

As Fair Bank is a separate entity and was never made a party to the case, the judgment
sought to be enforced against D Securities cannot be made against its parent company
Fair Bank.

Piercing the corporate veil based on the alter ego theory requires the concurrence of 3
elements:
1. Control of the corporation by the SH or parent corporation;
2. Fraud or fundamental unfairness imposed on the plaintiff, and
3. Harm or damage caused to the plaintiff by the fraudulent or unfair act of the
corporation.
Here, fraudulent intent is lacking. Hence, PVCF not applicable.

2008. I would sue Nelson, as the person who owned and controlled Sonnel
Construction Company, under the doctrine of PVCF. Although a corporation has a
JPSD from that of its SH, when the corporation is used merely as an alter ego or
controlled for the benefit of a SH, or when necessary to render justice, then the courts
have the right to PVCF to hold the controlling SH-officer personally liable for the
corporate acts.

2006. The doctrine of PVCF is applicable when the notion of legal entity is used to:
1. Defeat public convenience;
2. Justify wrong;
3. Protect fraud;
4. Defend crime;
5. Shield a violation of the proscription against forum shopping;
6. Work inequities among members of the corporation internally, involving no rights
of the public or third persons.
7. Evade the lawful obligations of the corporation like a judgment credit;
8. Escape liability arising from debt;
9. Avoid inclusion of corporate assets as part of the estate of the decedent; and
10. To promote or to shield unfair objectives.

2018. Corp Code; Doct of sep jurid personality from the SH,D,O; limited liab of SH to
his subscription to the capital stock of the corp
The doctrine of separate juridical personality is a principle of law which ordains that the
corporation has a separate legal personality from the SH, D and O composing it.
On the other hand, the limited liability rule, means that the liability of a SH who is not a
DOA of the corporation, is limited to his subsription to the capital stock of the
corporation.

5. Capital structure
a. Number and qualifications of incorporators
b. Subscription requirements
c. Corporate term
d. Classification of shares
i. Preferred shares versus common shares
1i. Scope of voting rights subject to classification
iii. Founders shares
iv. Redeemable shares
v. Treasury shares

CAPITAL STRUCTURE

2018. Corp Code; Capital structure; dividends declared based on URE; prohib from
retaining surplus profits in excess of 100% of their paid-in capital stock; XPN expansion
pp, prohib by loan agree’t; contingencies
Yi’s Board should not heed the demand of its preferred SH.
While the preferred shares are cumulative and participating, the holders thereof are
entitled to dividends only if the URE unrestricted retained earnings are sufficient to pay
such dividends.
Dividends are declared based on URE and not on the amount of net profit.
S42 of the Corp. Code xxx Stock corporations are prohibited from restraining surplus
profits in excess of 100% of their paid-in capital stock, except;
a. When justified by the definite corporate expansion projects or programs
approved by the BOD; or
b. When the corporation is prohibited under any loan agreement with financial
institutions or creditors, whether local or foreign, from declaring dividends without
their consent, and such consent has not yet been secured; or
c. When it can be clearly shown that such retention is necessary under special
circumstances obtained in the corporation, such as when there is need for
special reserve for probable contingencies.

2009. No, the suit will not prosper.

Paterno cannot compel XYZ Corporation to pay dividends, which have to be declared
by the BOD and the latter cannot do so, unless there are sufficient URE. Otherwise, the
corporation will be forced to use its capital to make said payment in violation of the trust
fund doctrine.
Likewise, redemption of shares cannot be compelled. While the certificate allows such
redemption, the option and discretion to do so are clearly vested in the corporation.

2013. The holding of Bernard Fleet equivalent to the OCS is illegal.

His holdings of preferred shares should not exceed 40%. Since, the constitutional
requirement of 60% Filipino ownership of the capital of public utilities applies not only to
voting control but also to beneficial ownership of the corporation, it should also apply to
preferred shares.
Preferred shares are also entitled to vote in certain corporate matters. The state shall
develop a self-reliant and independent national economy effectively controlled by
Filipinos. AII S19 Constitution. The effective control here should be mirrored across the
board on all kinds of shares.

2017. Capital in relation to public utilities refers to TOCS comprising both common and
non-voting preferred shares.
The term capital in relation to public utilities under S11 AXII Constitution refers to the
TOCS comprising both common and non-voting preferred shares.

6. Incorporation and organization

a. Promoter
i. Liability of promoter
1i. Liability of corporation for promoter's contracts
b. Subscription contract
c. Pre-incorporation subscription agreements
d. Consideration for stocks
e. Articles of Incorporation
i. Contents
1i. Non-amendable items

2009. A. Yes, the AOI defines the charter of the corporation and the contractual relp
between the State and the Corporation, the S and SH and between the C and the SH.
Its contents are thus binding upon both the corporation and the SH, conferring on
Juancho a clear right to have his stockholding recorded.
B. A quorum consist of the majority of the totality of the shares which have been
subsribed and issued.
Thus, the qurom for such meeting would be 289 shares or a majority of the 576 shares
issued and outstanding as indicated in the AOI. This includes the 33 common shares
reflected in the stock and transfer book, there being no mention or showing of any
transaction effected from the time of Triple A’s incorporation in 1960 up to the said
meeting. S52 S137 Corp Code.

f. Corporate name; limitations on use of corporate name

g. Registration, incorporation and commencement of corporate
existence
h. Election of directors or trustees
i. Adoption of by-laws
i. Contents of by-laws
1i. Binding effects
iii. Amendments
j. Effects of non-use of corporate charter
7. Corporate powers
a. General powers; theory of general capacity
b. Specific powers; theory of specific capacity
c. Power to extend or shorten corporate term
d. Power to increase or decrease capital stock or incur, create,
increase bonded indebtedness
e. Power to deny pre-emptive rights
f. Power to sell or dispose corporate assets
g. Power to acquire own shares
h. Power to invest corporate funds in another corporation or
business
1. Power to declare dividends
j. Power to enter into management contract
k. Limitations
i. Ultra vires acts
(a) Applicability of ultra vires doctrine
(b) Consequences of ultra vires acts

2016. Corp Code; Business judgement rule; all corp powers and prerogatives vested in
the BOD; not liable for mistake or errors in the exercise of BJ if GF, with due care and
prudence; derivative suit to prosper must exhaust the intra corp remedies available
The suit shall be ruled against Peter.
Under the business judgment rule embodied in S23 of the Corp Code, it provides that
unless otherwise provided in the Code, all corporate powers and prerogatives are
vested directly in the BOD. Directors cannot be held liable for mistakes or erros in the
exercise of their business judgment if they acted in GF, with due care and prudence.
Contracts intra vires entered into by the BOD are binding upon the corporation and the
courts will not interfere.
Furthermore, in order for a derivative suit to prosper, it must be shown with particularity
that the SH had exhausted the intra corporate remedies available.
Here, the sale of the shares by the BOD is not shown to have been made in BF nor was
it in breach of the trust of the SH. The said act is within the sound business judgment of
the Board.
Moreover, it was not shown that Peter had exhausted all intra-corporate remedies which
is required in a derivative suit.
Hence, the derivative suit shall be ruled against Peter for failure to show that the act
was made in BF and for his failure to exhaust all intra-corporate remedies.
Treasury shares does not have a fix value. It is for the BOD to fix the value of shares.

Express, implied, incidental powers.

l. Doctrine of individuality of subscription
m. Doctrine of equality of shares
n. Trust fund doctrine

TRUST FUND DOCTRINE

2005. A stock corporation may acquire its own shares:

In line with the trust fund doctrine that generally renders it unlawful for the corporation to
return assets to the SH representing capital, a corporation may acquire its own shares
only when there exists in the books URE to cover the repurchase of shares.
The purpose of the repurchase of shares must be a legitimate business purpose of the
corporation, such as to:
1. Eliminate fractional shares arising out of stock dividends;
2. Collect or compromise an indebtedness to the corporation arising out of unpaid
subscription in a delinquency sale;
3. To purchase delinquent shares sold during the sale; and
4. To pay dissenting or withdrawing SH entitled to such payment under the
Corporation Code.
S40 Power to acquire its own shares. Xxx

2019. Trust fund doctrine provides that the cpa capital stock, property and other assets
of the corporation are regarded as equity in trust for the payment of the corporate
creditors.
The subscribed capital stock of the corporation is a trust fund for the payment of debts
of the corporation, in which creditors have the right to look for the satisfaction of their
credits and the corporation may not dissipate this and the creditors may sue SH directly
for the unpaid subscription.

2015. By the trust fund doctrine, subscriptions to the capital stock of a corporation
constitute a fund to which the creditors have the right to look for the satisfaction of their
claims. The scope of the doctrine encompasses not only the capital stock, but also other
property and assets generally regarded in equity as a trust fund for the payment of
corporate debts.

i. How exercised
(a) By the shareholders
(b) By the board of directors
( c) By the officers

DOCTRINE OF APPARENT AUTHORITY

2015. By the DAA the corporation will be estopped from denying the agent’s authority
if it knowingly permits one of its officers or any other agent to act within the scope of an
apparent authority and holds him out to the public as possessing the power to do those
acts.
2013. Here, the facts did not state that the President was authorized by the BOD to
enter into the said contract or he was empowered to do so under some provision of the
by-laws of TF.
The facts also do not indicate that Rodman has been clothed with the apparent power to
execute the contract or agreements similar to it.
Second, TF has specifically informed Gregorio that it has ratified the contract for the
sale of 5,000 bags of fertilizer and that the delivery to Gregorio of 500 bags, which
Gregorio accepted, is an entirely new transaction.

8. Stockholders and members

a. Fundamental rights of a stockholder
b. Participation in management
i. Proxy
ii. Voting trust
iii. Cases when stockholders' action is required
(a) By a majority vote
(b) By a two-thirds vote
( c) By cumulative voting
iv. Manner of voting
c. Proprietary rights
i. Right to dividends
ii. Appraisal right
(a) When available
(b) Manner of exercise of right

RIGHTS OF A STOCKHOLDER

APPRAISAL RIGHT

2018. Corp code; appraisal right; granted by law, cannot be removed; AOI amended by
majority vote of the BOD and the assent of ⅔ OCS of SH
A. Yenetic’s AOI cannot be amended to remove appraisal right of the SH on matters
requiring their approval, in cases where the law grants the such appraisal right, like:
1. In case any amendment to the AOI which has the effect of changing or restricting
the rights of any SH or class of shares, or authorizing preferences in any respect
superiors to those of outstanding shares of any class, or of extending or
shortening the term of corporate existence;
2. In case of sale, lease, exchange, transfer, morgage, pledge or other dispostition
of all or substantially all of the corporate property and assets;
3. In case of merger;
4. In case of investment of funds in the secondary purpose of the corp or another
business.

B. Any provision or matter stated in the AOI may be amended by a Majority vote of the
BOD and the assent of ⅔ OCS of SH. SH cannot exercise any appraisal right in case of
amendment to the AOI to increase capital because this is not one of the cases allowed
by law where appraisal right may be exercised.

2017. Appraisal right; right to demand payment of fair value of his shares after
dissenting from a corp act; must attend meeting and filed written dissent
of Erica may exercise her appraisal right.
Appraisal right is the right of the SH to demand the payment of the fair value of his
shares after dissenting from a corporate act in cases specified by law.
Merger is one of them. However, it is imperative that she should have attended the SH
meeting or have filed written dissent, otherwise she could not exercise such right. S80
Corp Code

iii. Right to inspect

2017. Right to inspect

Sid may properly assert his right to inspect the books and other separate records of
Excellent under the following conditions:
1. The purpose of his inspection is legitimate and germane to his interest as a SH:
a. To ascertain the financial condition of the company or the propriety of
dividends;
b. The value of the shares of stock for sale or investment;
c. whether there has been mismanagement;
d. In anticipation of shareholder’s meetings to obtain a mailing list of
shareholders to solicit proxies or influence voting.
e. obtain information in aid of litigation with the corporation or its officers as to
corporate transactions.
2. The right should be exercised during reasonable hours on business day.
3. He has not improperly used any information secured in the previous examination.
If the right is to be denied on Sid, the burden of proof is upon the corporation to show
that the purpose of the SH is improper, by way of defense.

iv. Preemptive right

PRE-EMPTIVE RIGHTS

2019. A. Pre-emptive right under S38 of the RCC is the right of all SH in a stock
corporation to subscribe to all issues or disposition of shares of any class, in proportion
to their respective shareholdings.
The law further provides, however, that suc pre-emptive right shall not extend to shares
issued in compliance with laws requiring stock offerings or minimum stock ownership by
the public and to shares issued in GF with the approval of the SH representing ⅔ of the
OCS in exchange for a property needed for corporate purposes or in payment of
previously contracted debt.
S38 Power to Deny Preemptive Right

B. S38 of the RCC provides that the SH pre-emptive right may be denied by the AOI of
the stock corporation, or an amendment thereto.
Corollarily, the AOI may also limit the exercise of pre-emptive by the SH, as in the
present case.
Here, the notice sent to SH, including Ms. Z, merely reiterates that limit imposed by the
AOI. Likewise, Ms. Z’s pre-emptive right may be validly waived in accordance thereto,
without an express waiver in writing.
Hence, Ms. Z’s contention is incorrect for she already validly waived her right.
2018. Corp Code; Pre-emptive right; cannot be offered to new limited group of investors
without having offered to SH of record; pre-emptive rights granted by law
The new shares from the unissued shares cannot be validly offered to a new limited
group of investors without having to offer to SH of record, as pre-emptive are not
explicitly denied in the AOI. S39 of the Corp Code provides that all SH of a stock
corporation shall enjoy pre-emptive rights to subscribe to all issues or dispositions of
shares of any class in proportion to their respective shareholdings. There need not be
an explicit grant of pre-emptive rights in the AOI for it to exercised.

v. Right to vote
vi. Right to dividends
d. Remedial rights
i. Individual suit
ii. Representative suit
iii. Derivative suit

INTRA-CORPORATE DISPUTES

2019. Yes, the case filed is an intra-corporate dispute as the issue arose out of intra-
corporate relations.
In determining whether a dispute constitutes an intra-corporate controversy, the Court
uses 2 test, namely:
1. The relationship test, and
2. Nature of the controversy test.

An intracorp controversy is one which pertains to any of the following relationships:

5. Between the corporation, partnership,or association and the public,
6. Between the CPA and the State insofar as its franchise, permit or license to
operate is concerned;
7. Between CPA and its SH, M, or officers; and
8. Among SH, partners or associates themselves.

Under the nature of the controversy test, the controversy must not only be rooted in the
existence of an intra-corporate relp but must as well pertain to the enforcement of the
parties correlative rights and obligations under the RCC and the internal and intra-corp
regulatory rules of the corp.

B. Yes, the case filed is still considered an intra-corp dispute since he is still considered
a SH of the company whether the consideration is fully paid or not.

To determine if a case involves an intracorp dispute xxxx two test: xx

Here, Mr. Y is thus considered a SH of the company because he is an owner of the
shares of stock thereof despite not having fully paid the full purchase price.
Hence, being a SH, xx existence of intracorp relp and nature of controversy is intracorp.

2015. The court is not correct.

An action to be recognized as a SH and to inspect corporate documents, is an intra-
corporate dispute which does not constitute a continuation of business.
The dissolution of the corporation simply prohibits it from continuing its business.
Moreover, under S145 of the Corp Code, no right or remedy in favor of or against any
corporation, its SH, MDO shall be removed or impaired by the subsequent dissolution of
the corporation. The dissolution does not automatically convert the parties into
strangers or change their intra corporate relationship. Neither does it terminate existing
causes of action which arose because of the corporate ties of the parties. The cause of
action involving an intra-corporate controversy remains and must be filed as an intra-
corporate dispute despite the subsequent dissolution of the corporation.

2014. Medici is incorrect. Using the relationship test and the nature of controversy test,
it is indubitable that the controversy involves intra-corporate issues. The facts of the
problem indicate that there was a dispute as to the liability of DC for condominium dues,
as well as the right to DC to vote and be voted for during the 2011 election of Medici’s
BOD.
Accordingly, jurisdiction is with the SCC of Pasig City, not with the HLURB.

DERIVATIVE SUIT

2019. A. Derivative suit are those brought by one or more SH or members in the name
and on behalf of the corporation, to redress wrongs committed against it, to protect or
vindicate corporate rights whenever the officials of the corporation refuse to sue or the
ones to be sued or has control of the corporation.

B. No, the derivative suit filed by Mr. X was not proper, as Mr. X was not yet a SH when
the act complained off was performed.
For a derivative suit to prosper or valid, the following requisites must be met:
6. He was a SH or M at the time the acts or transactions subject of the action
occurred and at the time the action was filed;
7. He exerted al reasonable efforts, and alleges the same with particularity in the
complaint, to exhaust all remedies available under the AOI, by-laws, laws or rules
governing the corporation or partnership to obtain the relief desires;
8. No appraisal rights are available for the act or acts complained of;
9. The suit is not a nuisance or harassment suit; and
10. Corporation must be impleaded as a plaintiff.
Here, the first requisite is wanting. Mr. X became a SH on May 2019, the transaction
assailed by Mr. X was made May 2018, a year before he became a SH.
Hence, XXX derivative suit is not proper.

2016. Business judgment rule and Derivative suit

2014. The MTD should be granted.

The derivative suit is not the proper remedy. The members of the BOD of FLP
Corporation are the injured parties, not FLP Corporation, as their rights to vote and to
be voted upon were directly affected by the election of the new set of directors.

2013. The remaining directors cannot elect new directors to fill in the two vacancies.
The BOD may fill up vacancy only if the ground is not due to expiration of term, removal
or increase in the number of board seats.
Here, the term of the two directors expired after one year. Their hold-over period is not
part of their term. The vacancies should be filled up by election of the SH.
The derivative suit was improper.
In a DS, the corp not the SH must be the aggrieved party and that the SH is suing on
behalf of the corporation. What the SH X is asserting is his individual right as a SH to
elect the two directors. The case partakes more of an election contest under the rules
on intra-corporate controversy.

2009. A. Yes, Atty. Edric can initiate a DS, otherwise known as the minority SH suit.
It is allowed by law to enable the minority SH to protect the interest of the corp against
illegal or disadvantageous act/s of its OD, the people who are supposed to protect the
corporation.

B. Yes, such a suit would constitute an intra-corporate dispute as it is a suit initiated by

a SH against other SH who are OD of the same corporation. Such suit should be filed in
the RTC designated by the SC as a corporate or commercial court.

C. No, the suit will not prosper.

There is no requisite demand on the OD concerned.
Hence, no exhaustion of administrative remedies.

e. Obligations of a stockholder
f. Meetings
i. Regular or special
ii. Notice of meetings
iii. Place and time of meetings
iv. Quorum
v. Minutes and agenda of meetings

BOARD OF DIRECTORS
9. Board of directors and trustees
a. Repository of corporate powers
b. Tenure, qualifications and disqualifications of directors
c. Requirement of independent directors
d. Elections
i. Cumulative voting
ii. Quorum

e. Removal

2016. Corp Code; removal of director belongs to the SH; ⅔ vote of the OCS in a reg or
special meeting duly called for that purpose and notice to SH of the intention of
removal; with or without cause, except if intended to deprive the minority SH of the RoR
must be with a cause; amotion ousting an officer prior to the end of his term without
taking away right to be a member of the corp
A. He cannot be removed by his fellow directors.
The power to remove belongs to the SH. Any DT may be removed from office by a vote
of the SH rep ⅔ of the OCS, or in non-stock ⅔ M entitled to vote.
Provided that such removal shall take place.. Regular or special meeting duly called for
that purpose and either case after previous notice to SH of the intention to propose such
removal at the meeting. S27 RCC

Hence, xxx the removal may be with or without cause except if intended to deprive the
minority SH of the right of representation must be with a cause.
B. Amotion is the ousting of an officer from his or her post in the corp prior to the end of
the term for which the O was appointed or elected, without taking away the person’s
right to be a member of the corporation.

f. Filling of vacancies
g. Compensation

h. Disloyalty

DOCTRINE OF CORPORATE OPPORTUNITY

2005. The doctrine disqualifies the DTO from appropriating for his personal benefit a
transaction or opportunity that pertains to the corporation and which is under the duty of
loyalty of the corporate OD.
When a DTO attempts to acquire, in violation of his duty, an interest adverse to the corp
in respect of any matter which has been reposed in him in confidence, he shall be liable
as a trustee for the corporation and must account for the profits which otherwise would
have accrued to the corporation. Equity imposes liability upon him not to deal for his
own benefit. S31 RCC
Under S34 RCC where a director, by virtue of his office acquires xxx must account,
refund unless ratified by a vote of SH rep at least 2/8 of the OCS.

DOCTRINE OF APPARENT AUTHORITY

2015.

i. Business judgment rule

2016. Business judgment rule and Derivative suit

j. Solidary liabilities for damages

k. Personal liabilities
1. Responsibility for crimes
m. Special fact doctrine
n. Inside information
o. Contracts
i. By self-dealing directors with the corporation
ii. Between corporations with interlocking directors
p. Executive and other special committees
i. Creation
ii. Limitations on its powers
q. Meetings
i. Regular or special
(a) When and where
(b) Notice
( c) Attendance in meetings
1i. Who presides
iii. Quorum
iv. Rule on abstention
10. Capital affairs
a. Certificate of stock
i. Nature of the certificate
1i. Uncertificated shares
iii. Negotiability; requirements for valid transfer of stocks
iv. Issuance
(a) Full payment
(b) Payment pro-rata
v. Stock and transfer book
(a) Contents
(b) Who may make valid entries
( c) Stock transfer agent
v1. Lost or destroyed certificates
vii. Situs of the shares of stock
b. Watered stocks

LIABILITY OF THE BOD

Watered Stocks - solidarily liable

2015. Watered stocks are stocks issued for a consideration less than its par or issued
value or for a consideration in any form other than cash, valued in excess of its fair
value. Any DO of a corp consenting to the issuance of watered stock or who having
knowledge thereof, does not forthwith express his objection in writing and file the same
with the corporate secretary shall be solidarily liable with the SH concerned to the
corporation and its creditors for the difference between the fair value received at the
time of issuance of the stock and the par or issued value of the same. S65 RCC

2012. No, in approving the transaction, the directors were not acting in their personal
capacities but rather on behalf of XYZ Corporation exercising the powers of the
corporation and conduct of its business. S22 RCC.
Here, there are no facts that would indicate that the directors acted otherwise.
S22 RCC. The BOD or Trustees of a Corp; Qualification and Term. -
Unless otherwise provided in this Code, the BOD or Trustees shall exercise the
corporate powers, conduct all business and control all properties of the corporation. xxx

i. Definition
ii. Liability of directors for watered stocks - Solidarily liable
iii. Trust fund doctrine for liability for watered stocks
c. Payment of balance of subscription
i. Call by board of directors
ii. Notice requirement
d. Sale of delinquent shares
i. Effect of delinquency
1i. Call by resolution of the board of directors
iii. Notice of sale
iv. Auction sale
e. Alienation of shares
i. Allowable restrictions on the sale of shares
1i. Sale of partially paid shares
iii. Sale of a portion of shares not fully paid
iv. Sale of all of shares not fully paid
v. Sale of fully paid shares
vi. Requisites of a valid transfer
vii. Involuntary dealings
f. Corporate books and records
i. Records to be kept at principal office
ii. Right to inspect corporate records

iii. Effect of refusal to inspect corporate records

11. Dissolution and liquidation

a. Modes of dissolution
i. Voluntary dissolution
(a) Where no creditors are affected
(b) Where creditors are affected
( c) By shortening of corporate term
( d) Withdrawal of dissolution
ii. Involuntary dissolution
b. Methods of liquidation
i. By the corporation itself
1i. Conveyance to a trustee within a three-year period
iii. By management committee or rehabilitation receiver
iv. Liquidation after three years

2015. Right to inspect is an intra-corporate dispute which does not constitute a

continuation of business. The dissolution of the corporation simply prohibits it from
continuing its business.
Moreover under S184 of the RCC, no right or remedy in favor of or against any
corporation, its SH M or D and O shall be removed or impaired by the subsequent
dissolution of the corporation.
The dissolution does not automatically convert the parties into strangers or change their
ICD intra-corp dispute relp.
Neither does it terminate existing COA which arose because of the corporate ties of the
parties. The COA involving an ICD remains and must be filed as ICS despite the
subsequent dissolution of the corporation.

B. After 4 years, the action cannot prosper because the corporation has no more legal
capacity to sue after 3 years from its dissolution.

12. Other corporations

a. Close corporations
i. Characteristics of a close corporation
1i. Validity of restrictions on transfer of shares
iii. Issuance or transfer of stock in breach of qualifying
conditions
1v. When board meeting is unnecessary or improperly held
v. Preemptive right
vi. Amendment of articles of incorporation
vii. Deadlocks

b. Non-stock corporations
i. Definition
1i. Purposes
iii. Treatment of profits
iv. Plan and distribution of assets upon dissolution
c. Educational corporations
d. Religious corporations
i. Corporation sole; nationality
ii. Religious societies
e. One person corporations
i. Excepted corporations
1i. Capital stock requirement
iii. Articles of incorporation and by-laws
iv. Corporate name
v. Corporate structure and officers
vi. Nominee
vii. Minutes and records
v111. Liability
ix. Conversion of corporation to one person corporations and
vice-versa
f. Foreign corporations
i. Bases of authority over foreign corporations
(a) Consent
(b) Doctrine of "doing business"

ii. Necessity of a license to do business

(a) Requisites for issuance of a license
(b) Resident agent
( c) Amendment of license
iii. Personality to sue
iv. Suability of foreign corporations

v. Instances when unlicensed foreign corporations may be allowed to sue (isolated transactions)

2015. The defense is not tenable.

The mere act of exporting from one’s own country, without doing any specific
commercial act within the territory of the importing country cannot be deemed as doing
business in the importing country.
Hence, the foreign company may sue the Ph despite lack of license to do business in
the Ph.

vi. Grounds for revocation of license

13. Merger and consolidation

a. Definition and concept
b. Distinguish: constituent and consolidated corporation
c. Plan of merger or consolidation
d. Articles of merger or consolidation
e. Procedure
f. Effectivity
g. Limitations
h. Effects

MERGER OF CORPORATIONS

2016. Corp Code; merger; no merger if the reqt and proc for merger was not observed
and no cert of merger was issued by the SEC
There was no merger or consolidation of the two banks from the viewpoint of the RCC.
The SC has held that there can be no merger if the requirements and procedure for
merger were not observed and no certificate of merger was issued by the SEC.

14. Investigations, offenses, and penalties

a. Authority of Commissioner
i. Investigation and prosecution of offenses
ii. Administration of oath and issuance of subpoena
iii. Cease and desist power
iv. Contempt
b. Sanctions for violations
i. Administrative sanctions
ii. Prohibited Acts
iii. Penalties
iv. Who are liable
c. Authority of the Securities and Exchange Commission

V. SECURITIES

A. State policy
B. Definition of securities
C. Kinds of securities
1. Exempt securities
2. Exempt transactions
3. Non-exempt transactions

D. Powers and functions of the Securities and Exchange Commission

E. Procedure for registration of securities

F. Prohibitions on fraud, manipulation, and insider trading

1. Manipulation of security prices
2. Short sales
3. Option trading
4. Fraudulent transactions
5. Insider trading

G. Protection of shareholder interests

1. Tender offer rule
2. Rules on proxy solicitation
3. Disclosure rule

SECURITIES REGULATION CODE

Principal purpose of the laws and regulation concerning securities in the Ph is to protect
the public against the nefarious practices of unscrupulous brokers and salesmen in
selling securities.

SECURITIES
Stocks, bonds notes, convertible debentures, warrants or other documents that
represent a share in a company or debt owned by a company or government entity.
Evidence of obligations to pay money or of rights to participate in earnings and
distribution of corporate assets.
Instruments giving to their legal holders rights to money or other property.
They are therefore instruments which have intrinsic value and are recognized and used
as such in the regular channels of commerce.

TENDER OFFER RULE

2019. B.4. No, XYZ Inc is not required to conduct a tender offer.
Under Sec. 19 of the SRC or RA 8799 on Tender Offers and SEC Rules, any person or
group of persons acting in concert who intends to
(1) acquire at least 15% of any class of any equity security of a corporation with assets
of at least Fifty Million Pesos, P50,000,000, and having 200 or more SH with at least
100 shares each or
(2) acquire at least 35% of such equity over a period of 12 months,
(3) acquire less than 35% but results in ownership of over 51% of the total outstanding
equity securities of the public company
shall make a tender offer to SH by filing with the Commission a declaration to that
effect; and furnish the issuer, a statement containing such of the information required in
Sec. 17 of this Code as the Commission may prescribe.

Such person or group of persons shall publish all requests or invitations for tender, or
materials making a tender offer or requesting or inviting letters of such security.

Copies of any additional material soliciting or requesting such tender offers subsequent
to the initial solicitation or request shall contain such information as the Commission
may prescribe and shall be filed with the Commission and sent to the issuer not later
than the time copies of such materials are first published or sent or given to security
holders.

Here, the acquisition of the 12% shareholding does not meet the 35% threshold nor
does it result in ownership of over 51% of the TOES of ABC Corp.
Hence, XYZ Inc is not required to make a tender offer.

2018. SRC; tender offer; 15% in one acq, 35% in 12mons , 51% of the TOES of a
public company
In acquiring 75% of the TOCS of YCC, YEI should be required to do a mandatory tender
offer. By acquiring the combined 75% shareholdings of YMI and YCI in YCC, YEI
effectively owns 45% of YCC. Add to that the 20% it directly owns in YCC, YEI now
owns and controls 65% of YCC.
Once a person singly or in concert with others acquires more than 50% of the voting
stock of a public company, mandatory tender offer rule applies.
The tender offer rule covers not only direct acquisition but also indirect acquisition or
any type of acquisition. Whatever may be the method by which control of a public
company is obtained either through direct purchase of its stocks or through indirect
means, mandatory tender rule applies.

2016. SRC; tender offer; 15% in one acq, 35% in 12mons , 51% of the TOES of a
public company
A. Tender offer rule means a publicly announced intention by a person acting alone or
in concert with other persons to acquire the TOES of a public company or its associate
or related company which controls said public company. S19.1.8 SRC Implementing
Regulation

Tender offer is in place to protect minority SH against any scheme that dilutes the share
value of their investments. It gives the minority SH the chance to exit the company
under reasonable terms, giving them the opportunity to sell their shares at the same
price as those of the majority SH.

B. Yes, the mandatory TOR is still applicable even if the acquisition, direct or indirect, is
less than 35% when the purchase would result in direct or indirect ownership of over
50% of the TOES of a public company.

2010. Same 2019

REGISTRATION OF SECURITIES/INVESTMENT CONTRACTS

2018. Corp code; doct of sep jur pers and limited liab not applicable if officer acted in
bad faith and fraud; officer liability
B. Yokada cannot validly invoke the doctrine of separate juridical personality and limited
liability.
Yokada acted in bad faith in withdrawing 300 Million for his personal account. Having
acted in BF, he becomes solidarily liable with the corporation. Further, having issued
securities to the public without prior approval of the SEC is also another basis to hold
him solidarily with the issuer corporation.

2018. SRC; registration of securities/investment contracts; not investment contract since

option only granted to one not to public
No, the option granted to Yelp Pictures is not registered under the SRC.
While options are securities, the option was granted only to Yelp Pictures and not to the
public. As a consequence, the option need not be registered with the SEC.

2016. SRC; investment contract must be reg’d in SEC; Howey Test; investment
contract is a contract, transaction or scheme xxx
The SC has held that any investment contract covered by the Howey Test must be
registered under the Securities Act, regardless of whether its issuer was engaged in
fraudulent practices.
The SRC defines an investment contract as a contract, transaction or scheme whereby
a person invests his money in a common enterprise and is led to expect profits not
solely but primarily from the efforts of others. - HOWEY TEST.

Here, a person will invest at least P100,000 with ABC Corp with the expectation of profit
or return of investment of 50% within a month.
Hence, ABC Corp is engaged in the sale or offer for sale or distribution of investment
contracts.

2015. A. Yes, because under the SRC, securities shall not be sold or offered to be sold
to the public within the Ph unless securities are registered with and approved by the
SEC.
Public means 20 or more investors.
The fact that the securities were sold during a 15 month period is immaterial.
However the sale of securities to less than 20 investors if done during a 12 month
period is an exempt transaction under the SRC.

B. The rationale for the exemption of securities issued by the Ph government is that the
public is amply protected even without the registration of the securities to be issued by
the government, since the government is presumed to be always solvent.

C. The SRC is called a “truth in securities law” because it requires the issuer to make a
full and fair disclosure of information about securities being sold or offered to be sold
within the Ph, and penalizes manipulative and fraudulent acts, devices and schemes.

2015. The MTD should be denied.

Civil suits falling under the SRC, like liability for selling unregistered securities, are
under the EOJ of the RTC and hence, need not be first filed before the SEC unlike
criminal cases, wherein the latter body exercises primary jurisdiction. - So if crim aspect
under SRC file first sa SEC before appealing to reg courts.

PROHIBITED ACTS

2019. BB.5. A. Yes, the information of the P5 Billion construction contract is a material
nonpublic.
Under Subsection 27.2 of SRC, an information is material nonpublic if:
3. It has not been generally disclosed to the public and would likely to affect market
price of the security after being disseminated to the public and the lapse of a
reasonable time for the market to absorb the information; or
4. Would be considered by a reasonable person important under the circs in
determining his course of action whether to buy, sell or hold a security.
Here, the information of the P5 Billion construction contract acquired by xxxx is not gen.
Disclosed xxx affects market price xxx.
Hence, it is considered material nonpublic information in insider trading.

B. Yes, Mr. P and B are both liable for insider trading.

Subsection 27.1 of the SRC provides that it shall be unlawful for an insider to sell or buy
a security of the issuer, while in possession of material information with respect to the
issuer or the security that it is not generally available to the public. Further, Subsection
27.1 provides that it shall be unlawful for any insider to communicate material nonpublic
information about the issue or the security to any person who, by virtue of the
communication, becomes an insider as defined in Subsection 3.8, where the insider
communicating the information knows or has reason to believe that such person will
likely buy or sell a security of the issuer whole in possession of such information.

In the present case, Mr. P as pres of JKL, is deemed as an insider that is prohibited by
law to buy a security of the issuer, JKL, while in possession of material nonpublic
information with respect to the P5 Billion construction contract. As to Mr. B, by virtue of
the communication made by Mr. P to him, he also becomes an insider as defined in
Subsection 3.8.
Hence, Mr. P and B are liable for insider trading as prohibited by law when they bought
shares of the JKL while having knowledge of the said material nonpublic information.

2018. SRC; insider trading; buying and selling of securities while in possession of MNPI
B. Yolly cannot be held liable for insider trading.
Insider trading is the buying and selling of securities by an insider while in the
possession of material non-public information. MNPI
While Yolly is an insider because she has access to MNPI by reason of her relp with the
issuer, she did not, however, buy or sell securities. She is liable , however, for having
communicated MNPI about the issuer to any broker who by virtue of such
communication becomes an insider considering that Yolly, the insider communicating
the information knows or has reason to believe that the broker will likely buy or sell a
security of the issuer while in possession of such information S27.3 SRC.
The law makes no distinction that the insider is buying for himself for the account of
another.
As such, it is immaterial that the broker purchased securities for the account of Yolly’s
husband. The information about the MTO is also material as it will likely affect the
decision of a reasonable person to buy or sell the securities.

2015. Insider trading is the buying or selling of securities by an insider while in

possession of a MNPI.

VI. BANKING

A. THE NEW CENTRAL BANK ACT

a. State policies
b. Creation of the Bangko Sentral ng Pilipinas
c. Responsibility and primary objective
d. Corporate powers
e. Operations of the Bangko Sentral ng Pilipinas
a. Authority to obtain data and information
b. Supervision and examination
c. Bank deposits and investments
d. Prohibitions
e. Examination and fees
f. Monetary Board; powers and functions
g. How the Bangko Sentral ng Pilipinas handles banks in distress
a. Conservatorship
b. Closure
c. Receivership
d. Liquidation
h. Administrative sanctions on supervised entities
i. Rules on bank deposits and investments by directors, officers,
stockholders and their related interests
J. Supervision and regulation of bank operations
a. Loans and other credit accommodations
b. Selective regulation
i. Margin requirements against letters of credit
1i. Required security against bank loans
iii. Portfolio ceilings
iv. Minimum capital ratios
k. Rate of exchange

BANKING LAWS
CENTRAL BANK OF THE PHILIPPINES

2015. A. BSP is considered the lender of last resort because it lends to banks and
similar institutions under financial distress when they have no other means to raise
funds.

B. Conservator vs receiver of a bank

A conservator is appointed if a bank or quasi-bank is in a state of continuing inability or
unwillingness to maintain a condition of liquidity, deemed adequate to protect the
interest of creditors and depositors.
The conservator shall take charge of the assets and liabilities of the bank and exercise
management and other powers to restore the bank’s viability.
The conservatorship shall not exceed 1 year.

On the other hand, the receiver is appointed generally, if the realizable value of the
bank’s assets as determined by BSP is less than its liabilities.
The receiver shall take charge of the assets and liabilities of the institution and
administer the same for the benefit of its creditors.
The receiver shall determine within 90 days whether the bank can be rehab, otherwise,
he shall recommend the closure of the institution.

B. LAW ON SECRECY OF BANK DEPOSITS

1. Purpose
2. Prohibited acts
3. Deposits covered
4. Exceptions
5. Garnishment of deposits, including foreign deposits
6. Penalties for violation

2019. B.6. Mayor J’s peso saving account with Bank P may be subject to garnishment.
The SC has held that the prohibition against examination of or inquiry into deposit under
RA 1405 of the Bank Secrecy Law does not preclude being garnished to insure
satisfaction of judgment.

Further, the SC also held that the disclosure of deposits to satisfy the writ of
garnishment issued by the court is not a violation of deposit secrecy since their
disclosure is purely incidental to the execution process.

However, Mayor J’s US Dollar account in Bank D may not be subject to garnishment.

Sec. 8 of the Foreign Currency Deposit Act provides that all foreign currency deposits
authorized under this Act, as amended by PD no. 1035, are hereby declared as and
considered of an absolutely confidential nature.
These forein currency deposits shall be exempt from attachment, garnishment, or any
other order or process of any court, legislative body, government agency or any
administrative body whatsoever.

2018. Bank laws; Law on of secrecy bank deposits; XPN consent of depositor or bank
inquiry order issued by competent court; mere suspicion of acts of graft and bribery not
ground to lift law on secrecy
A. Yes, the legal position of YB in requiring written permission from the depositor is
correct.
The AMLC cannot order the bank to inquire into the bank account of any depositor on
mere suspicions of acts of graft and bribery without his written consent or a bank inquiry
order issued by the competent court.

2015. B. First Bank should comply with the order of garnishment over a client’s peso
deposits, because there is nothing in RA 1405 that places bank deposits beyond the
reach of judgment creditor.
And the disclosure of information on bank deposits pursuant to the writ of garnishment,
is only incidental to the execution process.
The dollar deposits, however, are exempt from garnishment or court order under the
Foreign Currency Deposit Act.
Hence, the bank should not comply with this part of the garnishment.

CLASSIFICATION OF BANKS

2015. A commercial bank cannot acquire shares in a cement manufacturing company,

because a commercial bank can only invest in the equity of allied undertakings,
meaning undertakings related to banking S30 RA 8791

2010. Universal Bank

1. A universal bank is a commercial bank with 2 additional powers, namely:
a. The power of an investment house and
b. The power to invest in non-allied enterprises. S23 The Gen Banking Law
Xx

5. Cooperative banks include those which are organized primarily to provide financial
and credit services to cooperatives and whose operations are primarily governed by the
Cooperative Code of the Ph.

IMPOSABLE INTEREST

2018. Bank laws; unilateral increase interest rate; stip is a sole potestative condition
which violates principle of mutuality of contracts; stip is null and void
A. YBC Bank cannot unilaterally increase the interest rates on the loan.
A stipulation allowing the bank to increase the interest rate unilaterally is a sole
potestative condition which violates the principle of mutuality of contract and such is null
and void.

2016. Bank laws; escalation clause; de-escalation clause

Escalation clauses are generally valid and do not contravene public policy.
They are common in credit agreements as means of maintaining fiscal stability and
retaining the value of money on long-term contracts.
To prevent any one-sidedness that these clauses may cause, the SC has held that
there should be a corresponding de-escalation clause that would authorize a reduction
in the interest rates corresponding to downward changes made by law or by the
Monetary Board.

RESTRICTIONS ON LOAN ACCOMMODATIONS

SINGLE BORROWER’S LIMIT

2015. 1. Under the SBL single borrower’s limit, the total amount of loans, credit
accommodations and guarantee that the bank may extend to any person, shall not
exceed 25% of the bank’s net worth.
While the law sets the ceiling at 20% of the bank’s net worth, it also empowers the BSP
to modify the ceiling. The current SBL as set by BSP, is 25% of the Bank’s net worth.

2. DOSRI Rules - These rules promulgated by the BSP, upon authority of S5 GBL,
which regulate the amount of credit accommodations that a bank may extend to its DO
SH related interests or DOSRI. Generally, a bank’s credit accommodation to its DOSRI
must be in the regular course of business and on terms not less favorable to the bank
than those offered to non-DOSRI borrowers.

3. No commercial bank shall make any loan or discount on the security of shares of its
own capital stock.

C. GENERAL BANKING ACT

1. Definition and classification of banks
2. Distinction of banks from quasi-banks and trust entities
3. Bank powers and liabilities
a. Corporate powers
b. Banking and incidental powers
4. Diligence required of banks in view of fiduciary nature of banking
5. Nature of bank funds and bank deposits
6. Grant of loans and security requirements
a. Ratio of net worth to total risk assets
b. Single borrower's limit
c. Restrictions on bank exposure to directors, officers,
stockholders, and their related interests DOSRI
d. Prohibited acts of borrowers SBL DOSRI
e. Floating interest rates and escalation clauses
7. Penalties for violations
a. Fine, imprisonment
b. Suspension or removal of director or officer
c. Dissolution of bank

D. PHILIPPINE DEPOSIT INSURANCE CORPORATION ACT

1. Basic policy
2. Powers and functions of the Philippine Deposit Insurance
Corporation; prohibitions
3. Concept of insured deposits
4. Liability to depositors
a. Deposit liabilities required to be insured with Philippine
Deposit Insurance Corporation
b. Commencement of liability
c. Deposit accounts not entitled to payment
d. Extent of liability
e. Determination of insured deposits
f. Calculation of liability
i. Per depositor, per capacity rule
Ii. Joint accounts
Iii. Mode of payment
iv. Effect of payment of insured deposits
v. Payment of insured deposits as preferred credit
vi. Failure to settle claim of insured depositor
v11. Failure of depositor to claim insured deposits
(a) Examination of banks and deposit accounts
(b) Prohibition against splitting of deposits
( c) Prohibition against issuances of temporary restraining
orders

5. Concept of bank resolution

6. Role of the Philippine Deposit Insurance Corporation in relation to
banks in distress
a. Closure and takeover
b. Conservatorship
c. Receivership
d. Liquidation

Q: Pursuant to an order of the Monetary Board, the PDIC was designated as receiver
of Cosmopolitan Bank. May the PDIC later on recommend the rehabilitation of
Cosmopolitan Bank?

No, the PDIC cannot later on recommend the rehabilitation of Cosmopolitan Bank.

Under Sec. 12(a) of the New Charter of PDIC Act, whenever a bank is ordered closed
by the Monetary Board, the PDIC shall be designated as receiver of the closedbank. For
this purpose, banks closed by the Monetary Board shall no longer be rehabilitated.

Here, pursuant to an order of the Monetary Board, the PDIC was designated as
receiver.

Therefore, Cosmopolitan Bank is a closed bank and the PDIC cannot recommend the
rehabilitation of Cosmolitan Bank.

2019. A1.D. Splitting of deposits

Under RA 3591 or the PDIC Act, splitting of deposit occurs whenever a deposit account
with an outstanding balance of more than P500,000 under the name a person is broken
down and transferred to two or more accounts in the name of person or entities who
have no beneficial ownership in the transferred deposits in their names within 120 days
immediately preceding or during a bank-declared holiday or immediately preceding a
closure order issued by the Monetary Board for the purpose of availing the maximum
deposit insurance coverage. This is a criminal act and the deposits are not entitled to
any insurance payment.

VII. INTELLECTUAL PROPERTY

A. Intellectual property rights in general

1. Intellectual property rights
2. Differences between copyright, trademarks, and patents

DISTINCTION
2015. Differentiate trademark, copyright and patent
1. As to definition:
Trademark is any visible sign capable of distinguishing goods.
Copyright is an incorporeal right granted by statute to the author or creator of
original literary and artistic works whereby he is invested for a limited period of
time with the right to carry out, authorize and prevent the reproduction,
distribution, transformation, rental, public performance and other forms of
communication of his work to the public.
Patent is any technical solution of any problem in any field of human activity
which is new, requires an inventive step and is industrially applicable.
2. As to object:
The objects of TM are goods, copyright are original literary and artistic works and
patent is invention.
3. As to term:
TM 10 years, copyright 50 years, and patent is 20 years from application.
4. As to how acquired:
TM is acquired through registration and use.
Copyright is acquired from the moment of creation.
Patent is acquired through application with the IPO,

3. Technology transfer arrangement

2010. Contractual stipulations required in all technology transfer agreements ar the

following:
1. The laws of the Ph shall govern its interpretation and in the event of litigation, the
venue shall be the proper court in the place where the licensee has its principal
office;
2. Continued access to improvements in techniques and processes related to the
technology shall be made available during the period of the technology transfer
arrangement.
In case it shall provide for arbitration, the Procedure of Arbitration of the
Arbitration Law of the Ph or the Arbitration Rules of the UN Commission on
International Trade Law or the Rules of Arbit of the Intl Chamber of Commerce
shall apply and the venue of arbitration shall be the Ph or any neutral country;
3. The Ph taxes on all payment relating to TTA shall be borne by the licensor. S88
ICP

B. Patents
1. Patentable invention

2019. A.9. The requisites of patentability are:

4. Novelty;
5. Inventive step; and
6. Industrial applicability.

Any technical solution of a problem in any field of human activity which is new, involves
an inventive step and is industrially applicable shall be patentable. Sec. 21 IPC.
The IPC defines the following as:
4. Novelty, that it shall not form part of a prior art;
 5. Inventive step, that it is not obvious to a person skilled in the art at the time of the
filing date or priority date of the application for the patent, and
6. Industrial applicability, that the invention can be produced and used in any
industry.

B. No, it is not patentable for lack of the requisite inventive step.

An invention involves an inventive step if, having regard to prior art, it is not obvious to a
person skilled in the art at the time of the filing date or priority date of the application
claiming the invention. Sec. 26 IPC
Discovering a new use or form of patented products does not amount to an inventive
step since it is not unobvious to persons skilled in the art as proven by the previous
patent registration of Marvelopis. An exception is when there is a substantial
improvement such as addition of a new active ingredient, which is not present in this
case.

2018. IP Law; patentable invention; still patentable even if patentee sold to public
before registration; not new if forms part of prior art and made available to the public
before application; must be a person other than the patentee who invented and sold to
public to be considered as not new
A. Yosha’s invention is still patentable despite the fact that he had sold several models
to the public before the formal application for registration of the patent was filed with the
IPO.
It is true that an invention shall not be considered new if it forms part of a prior art and
that prior art shall consist of everything which has been made available to the public
anywhere in the world, before the filing date or the priority date of the application
claiming the invention.
This, however, presupposes that the one who has made available the patentable
invention to the public is a person other than the applicant for patent.

2017. Patentable invention; Consent; XPN Compulsory lic Govt public interest, natl sec,
nutri, health, national emerg; DOH file pet for comp lic w/ Dir of Legal Affairs of the IPO
to exploit the patented med; pay royalty to patentee
A government agency or third person authorized by the government may exploit the
invention even without agreement of the patent owner where, among other:
1. The public interest, in particular, national security, nutrition, health or the
development of other sectors, as determined by the appropriate agency of the
government, so requires; or
2. In the case of drugs and medicines, there is a national emergency or other
circumstance of extreme urgency requiring the use of the invention.

Here, the prevalence of AIDS could fall under the national emergency.
DOH may file a petition for compulsory license with the Director of Legal Affairs of the
IPO to exploit the patented medicine even without the agreement of the patent owner.
Once granted, the DOH may then produce and sell the AIDS medicines for cheaper
price subject to payment of reasonable royalties to Super Biology.

2. Non-patentable invention
2010. Dr. Nobel can be protected by a patent for the new medicine as it falls within the
scope of S21 of the IPC. But no protection can be legally extended to him for the
method of diagnosis and method of treatment which are expressly non-patentable. S22
IPC.

2006. Yes the IPO is correct because under the IPC, discoveries, scientific theories and
mathematical methods, are classified to be as “non-patentable inventions”,
Einstein’s theory of relativity falls within the category of being a non-patentable
“scientific theory”.

3. Ownership of a patent
a. Right to a patent
b. First-to-file rule
c. Invention created pursuant to a commission
d. Right of priority
4. Grounds for cancellation of a patent
5. Remedy of the true and actual inventor
6. Rights conferred by a patent
7. Limitations of patent rights
a. Prior user
b. Use by the government
8. Patent infringement
a. Tests in patent infringement
i. Literal infringement
ii. Doctrine of equivalents
b. Civil and criminal action
c. Prescriptive period
d. Defenses in action for infringement
9. Licensing
a. Voluntary
b. Compulsory
10. Assignment and transmission of rights

A.9. The requisites of patentability are:

7. Novelty;
8. Inventive step; and
9. Industrial applicability.

Any technical solution of a problem in any field of human activity which is new, involves
an inventive step and is industrially applicable shall be patentable. Sec. 21 IPC.
The IPC defines the following as:
7. Novelty, that it shall not form part of a prior art;
8. Inventive step, that it is not obvious to a person skilled in the art at the time of the
filing date or priority date of the application for the patent, and
9. Industrial applicability, that the invention can be produced and used in any
industry.

B. No, it is not patentable for lack of the requisite inventive step.

An invention involves an inventive step if, having regard to prior art, it is not obvious to a
person skilled in the art at the time of the filing date or priority date of the application
claiming the invention. Sec. 26 IPC
Discovering a new use or form of patented products does not amount to an inventive
step since it is not unobvious to persons skilled in the art as proven by the previous
patent registration of Marvelopis. An exception is when there is a substantial
improvement such as addition of a new active ingredient, which is not present in this
case.

C. Trademarks
1. Definitions of marks, collective marks, and trade names
2. Acquisition of ownership of mark
3. Acquisition of ownership of trade name
4. Non-registrable marks
5. Prior use of mark as a requirement
6. Tests to determine confusing similarity between marks
a. Dominancy test
b. Holistic test

DOMINANCY VS HOLISTIC TEST

2016. IP Law; confusion of marks and trade names to deceive purchasers; Dominancy
vs Holistic test; HT entirety not only dominant features; DT dominant features,
infringing mark likely to cause confusion; confusion of goods; confusion of business

Yes, application of Holistic Test is correct.

The HT entails a consideration of the entirety of the marks as applied to the products,
including labels and packaging, in determining confusing similarity.
The scrutinizing eye of the observer must focus not only on the predominant words but
also on the other features appearing in both labels so that a conclusion may be drawn
as to whether one is confusingly to the other.

Relative to the question on confusion of marks and trade names, jurisprudence has
noted 2 types of confusion:
1. Confusion of goods (product confusion), where the ordinarily prudent purchaser
would be induced to purchase one product in the belief that he was purchasing
the other; and
2. Confusion of business (source of origin confusion), where although the goods of
the parties are different, the product, the mark of which registration is applied for
by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product and the public would then be deceived either into
that belief or into the belief that there is some connection between the two
parties, though inexistent.

2014. The Dominancy Test is the proper test to apply.

Thus, the appropriation and use of the letter S by inter-Pacific on its rubber shoes
constitutes an infringement of the trademark of Skecher.
Here, applying the Dominancy Test , we find that the use of the stylized S infringes on
the mark already registered by Skechers with the IPO.
While it is undisputed that the stylized S of Skechers is with oval design, the dominant
features of the TM is the stylized S, as it is precisely the stylized S which catches the
eye of the purchaser.
Hence, even if Inter-Pacific did not use an oval design, the mere fact that it used the
same stylized S, the same being the dominant feature of the TM of Skechers, already
constitutes infringement under the Dominancy Test.

Infringement under IPC, the infringing mark likely to cause confusion.

c. Idem sonans
7. Well-known marks
8. Rights conferred by registration
9. Use by third parties of names, etc. similar to registered mark
10. Infringement and remedies
a. Trademark infringement
b. Damages
c. Requirement of notice
d. Penalties

2019. A.10. Yes, W Hotels Inc’s defense against the petition for cancellation of
trademark is tenable.
The SC has held that the use of a registered mark representing the owner’s goods or
services by means of an interactive website may constitute proof of actual use that is
sufficient to maintain the registration of the same. Since the internet has turned the
world into one vast marketplace, the owner of a registered mark is clearly entitled to
generate and further strengthen his commercial goodwill by actively marketing and
commercially transacting his wares or services throughout multiple platforms on the
internet.

However, the mere exhibition of goods or services over the internet, without more, is not
enough to constitute actual use. Xxx.. transacted or at the very least intentionally
targeted customers of a particular jurisdiction in order to be considered as having the
trademark in the ordinary course of his trade in that country. A showing of an actual
commercial link to the country is therefore imperative. As the IP Code expressly
requires, the use of the mark must be within the Ph.

These facts and circs show that W Hotel Inc’s use of its W mark through its interactive
website is intended to produce a discernible commercial effect or activity within the Ph,
or at the very least, seeks to establish commercial interaction with local consumers.
Accordingly, W Hotel’s use of the W mark in its reservation services through its website
constitutes use of the mark sufficient to keep its registration in force.

2018. IP Law; brand name is proper subj of TM not copyright; copyright on TM does not
guarantee right to exclusive use; registration of a copyright no cond precedent for
copyright IS while reg of TM is a cond precedent for TM infringement suit; doctrine of
prior use; ownership of TM confers right to register not registration; well-known mark
applies only to mark well-known internationally
A. Aling Yoling cannot successfully obtain court relief to prohibit Aling Yasmin from
using the brand name “Ysmaellas” in her product on the basis of Aling Yoling’s
copyright.
The brand name “Ysmaellas” is proper subject of trademark not copyright.
They cannot be interchanged. The copyright on a trade name or mark does not
guarantee her the right to the exclusive use of the same for the reason that it is not a
proper subject of said intellectual right.

The registration of a copyright is only a proof of the recording of the copyright but not a
condition precedent for the copyright to subsist and for copyright infringement suit
whereas registration of a trade mark is an indispensable requisite for any trade mark
infringement suit.

B. Aling Yasmin can seek injunctive relief against Aling Yoling from using the brand
name “Ysmaellas” because the doctrine of prior use. It is ownership of the trademark
that confers the right to register. Registration does not confer ownership.
Here, Aling Yasmin was the first one to use the brand or trade name in commerce, then
she is considered the owner thereof.

C. No, Aling Yoling cannot seek the cancellation of Aling Yasmin’s trademark
registration of the brand name “Ysmaellas” on the ground of “well-known brand”.
Well-known marke rule only applies to a mark which is well-known internationally and in
the Ph S123E IPC.
Nevertheless, she can seek the cancellation of the trademark for being the prior user
even though the mark is not well-known.

2015. While RA 8293 removed the previous requirement of proof of actual use prior to
the filing of an application for registration of a mark, proof of prior and continuous use is
necessary to establish ownership of a trademark.
Such ownership of the trademark confers the rights to register the trademark. Since
Chen owns the trademark as evidenced by its actual and continuous use prior to Clark
Enterprises, then it is the one entitled to the registration of the trademark. The fact that
Clark was the first one to use the mark here in the Philippines will not matter.
Chen’s prior and actual use of the trademark even in another country, bars Clark from
applying for the registration of the same trademark.
Also, a mere distributor does not own the trademark to the goods he distributes, and his
right over the trademark cannot prevail over the owner.

2015. In infringement of trademark, prior registration of the trademark is a prerequisite

to the action, whereas in unfair competition, trademark registration is not necessary.
Trademark infringement is the unauthorized use of the registered trademark, while
unfair competition is the passing off one’s goods as those of another.
In infringement of trademark, fraudulent intent is unnecessary - mal prohib, whereas un
UC, fraudulent intent is essential.

2014. I would advise KU to file a petition to cancel the registration of the name “Kluwer”
Graduate School of Business of Mindanao with the Bureau of Trademarks.
It could be anchored on the following facts:
 1. KU is not the owner of the name “Kluwer”.. Here, given facts xxx Foreign marks
that are not registered are still accorded protection against infringement and/ UC
under the Paris Convention for Protection of Industrial Property. Both Ph and
Germany are signatories.
Under the said Convention, the TM of a national or signatory to the Paris
Convention is entitled to its protection in other countries that are also signatories
to the Convention without need of registering the TM.
2. Prove “Kluwer” as well-known mark and entitled to protection as belong to same
class of services. i.E. Class 41 education and entertainment..
3. Prior use
4.
200_ . C. The complaint for injunction to stop Lacoste International from featuring Many
Pacquiao in its advertisements will prosper. There is a violation of subsection 123 and
4c of the IPC and A169 in relation to A170 of the IPC.

D. No, Ph courts have no jurisdiction over Lacoste Int’l, if it is doing business in the Ph.
Moreover, under S133 of the Corp COde, while a foreign corporation doing business in
the Ph without a license to do business, cannot sue or intervene in any action, it may be
sued or proceeded against before our courts or administrative tribunal.

11. Unfair competition

2019. B. Unfair Competition

Sec. 168 of the IPC provides that unfair competition is one where any person employs
deception or any other means contrary to good faith by which he shall pass off the
goods manufactured by him or in which he deals, or his business or services for those
of the one having established such goodwill, or who shall commit any acts calculated to
produce said result.

12. Registration of marks under the Madrid Protocol

a. Coverage
b. Rights conferred
c. Requirements for registration
d. Term of protection

D. Copyright
A.
1. Basic principles
2. Copyrightable works
a. Original works
b. Derivative works
3. Non-copyrightable works
4. Rights of copyright owner
5. Rules on ownership of copyright
6. Limitations on copyright
a. Fair use

2019. A.8. Under the doctrine of fair use, persons other than the owner of the copyright
amy use the copyrighted material in a reasonable manner without his consent, provided
that it is used for criticism, comment, news reporting and teaching, including multiple
copies for classroom use, scholarship, research and similar purposes.

B. No, the KLM Printer’s Inc.’s invocation of fair use is not proper.

The law provides 4 factors to determine whether the use made of a work in any
particular case is a fair use:
5. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit education purposes;
6. The nature of the copyrighted work;
7. The amount and substantiality of the portions used in relation to the copyrighted
work as a whole; and
8. The effect of the use upon the potential market or value of the copyrighted work.

KLM Printer Inc. did not secure the consent from the authors.
The purpose of reproduction of the books was for profit.
The nature of the books were all copyrighted textbooks.
The amount and substantiality of the work is not just a substantial reproduction but the
reproduction of the entire textbooks.
The effect of the reproduction of the textbooks would be detrimental to the potential
market of the authors of the textbooks.
Hence, KLM Printer Inc. cannot invoke the doctrine of fair use as copyright infringement
was committed.

2017. Copyright; Audiovisual works and cinematographic works category incl news
reports , copyrightable
It falls under the category of audiovisual works and cinematographic works and works
produced by a process analogous to cinematography.
News of the day however is copyrightable.

7. Copyright infringement
a. Remedies
b. Criminal penalties

2017. Copyright; doct of fair use; educational purposes

No, there is no violation.
The fair use of a copyrighted work for criticism, comment, news reporting, teaching
including limited number of copies for classroom use, scholarship, research and similar
purposes is not an infringement of copyright. S185 RA 8294.
Here, Virtucio’s reproduction of the limited number of CD was for classroom use and
educational purposes thus negating copyright infringement.

2014. KK shall be liable for infringement of copyright.

The importation by KK of 50 copies of each foreign book prescribed in the UST and
selling them locally at 20% less than the price in the Ph than their respective prices in
the Ph is subject to the doctrine of fair use set out in S185.1 of the IPC.
The factors to be considered in determining whether the use made of a work is fair use
shall include:
1. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit educational purposes;
 2. The nature of the copyrighted work;
3. The amount and substantiality of the portion used in relation to the copyrighted
work as a whole; and
4. The effect of the use upon the potential market for or value of the copyrighted
work.
Applying the above-listed factors to the problem, KK’s importation of the books and their
sale locally clearly show the unfairness of her use of the books, particularly the adverse
effect of her price discounting on the business of XX.
XX, as the exclusive licensed publisher, is entitled, within the scope of the license, to all
the rights and remedies that the licensor has with respect to the copyright. S180 IPC

2009. The Denicola Test in intellectual property law states that if design elements of an
article reflect a merger of aesthetic and functional considerations, the artistic aspects of
the work cannot be conceptually separable from the utilitarian aspects.
Hence, the article cannot be copyrighted.

On the other hand, if there is any aesthetic element which can be separated from the
utilitarian elements, then the aesthetic element may be copyrighted.

VIII. SPECIAL LAWS

SECURED TRANSACTIONS
1. Personal Property Securities Act
a. Definitions and scope
b. Asset-specific rules
i. Future property
1i. Rights to proceeds and commingled funds
Iii. Tangible assets commingled in a mass
iv. Accounts receivables
c. Perfection of security interests
d. Registration
e. Priority of security interests
f. Tangible assets; intangible assets
g. Enforcement of security interests
h. Prior interests and the transitional period
2. Real Estate Mortgage Law
a. Definition and characteristics
i. Obligations secured by real estate mortgage
ii. Object of real estate mortgage
iii. Right to alienate mortgage credit
iv. Right to alienate collateral
b. Essential requisites
3. Guaranty
a. Nature and extent of guaranty
i. Obligation secured by guarantee
ii. Parties to a guaranty
iii. Excussion
iv. Right to protection
v. Right to indemnification
vi. Right to subrogation
vii. Rights of co-guarantors
b. Effects of guaranty
c. Extinguishment of guaranty
d. Legal and judicial bonds
4. Surety
a. Concept
b. Form of surety
c. Obligations secured
d. Surety distinguished from standby letter of credit
e. Surety distinguished from guaranty
f. Surety distinguished from joint and solidary obligations
5. Letters of credit
a. Definition and purpose
b. Kinds of letters of credit
c. Rule of strict compliance
d. Independence principle

B. TRUTH IN LENDING ACT

1. Purpose
2. Obligation of creditors to person to whom credit is extended
3. Covered and excluded transactions
4. Consequences of non-compliance with obligation

C. ANTI-MONEY LAUNDERING ACT

1. Policy of the law
2. Covered institutions and their obligations
3. Covered and suspicious transactions
4. Money laundering; how committed; unlawful activities or
predicate crimes
5. Anti-Money Laundering Council; functions
6. Safe harbor provision
7. Application for freeze orders
a. Who may apply
b. Effectivity
c. Duties of covered institutions
8. Authority to inquire into bank deposits
a. Forfeiture provisions
b. Mutual assistance among states

D. FOREIGN INVESTMENTS ACT

1. Policy of the law
2. Definition of terms
a. Foreign investment
b. "Doing business" in the Philippines
c. Export enterprise
d. Domestic market enterprise
3. Registration of investments of non-Philippine nationals
4. Foreign investments in export enterprises
5. Foreign investments in domestic market enterprises
6. Foreign Investment Negative List

E. INSOLVENCY LAWS
1. Concurrence and preference of credits
a. Meaning of concurrence and preference
b. Exempt properties
c. Classification of credits
d. Order of preference of credits
2. Financial Rehabilitation and Insolvency Act of 2010
a. Definition of insolvency
b. Suspension of payments
c. Rehabilitation
i. Types
ii. Commencement order
iii. Stay or suspension order
iv. Rehabilitation receiver
v. Management committee
vi. Rehabilitation plan
vii. Cram down effect
d. Liquidation
i. Types
ii. Conversion of rehabilitation to liquidation proceedings
iii. Liquidation order
iv. Rights of secured creditors
v. Liquidator
vi. Determination of claims
vii. Liquidation of plan

INSOLVENCY LAW

2019. B.1. A. Under FRIA, insolvency refers to the financial condition of a debtor that is
generally unable to pay its or his liabilities as they fall due in the ordinary course of
business or has liabilities that are greater than its or his assets.
W Medical cannot be considered as insolvent because to be insolvent under FRIA,
liabilities must be greater than assets.
Here, W Medical Inc assets are more than its liabilities.
Moreover, nothing in the facts state that it foresees its inability to pay its obligations for
more than one year.
Hence, it cannot be considered as insolvent.

B. No, assuming that W Medical is considered “insolvent”, the petition for suspension of
payments under S94 of FRIA may only be filed by an individual debtor who has
sufficient properties to cover all his debts but foresees the impossibility of meeting his
debts when they respectively fall due.
Here, if W Medical Inc is insolvent, then he has no sufficient properties to cover all his
debts because his liabilities are greater than his assets.
Hence, W Medial cannot file a petition for suspension of payments under FRIA.

C. Under FRIA, W Medical Inc, may opt to avail (1) court supervised voluntary
proceedings or (2) pre-negotiated rehabilitation.
W Medical Inc, may avail the former should it foresee the impossibility of meeting debts
when they respectively fall due.
W Medical Inc, may likewise file a verified petition with the court of the approval of a
pre-negotiated Rehabilitation Plan, which has been endorsed or approved by creditors
holding at least ⅔ of the total liabilities of the debtor, including secured creditors holding
more than 50% of the total secured claims of the debtor and unsecured creditors
holding more than 50% of the total unsecured claims of the debtor.
D. Yes, it is possible for the rehabilitation proceedings to be converted into one for
liquidation.
Under Se. 25 of FRIA, when the debtor is insolvent and there is no substantial likelihood
for a successful rehabilitation and there is failure of rehab, the court may convert the
proceedings to liquidation proceedings.
Hence, a petition for rehab may be converted into a liquidation proceedings.

B.2. A. No, the case against Z Insurance Co should not be suspended despite the
commencement order issued to EFG Inc.
Under Sec.18c of FRIA, the stay order, which is included in the commencement order,
shall not apply to the enforcement of claims against sureties solidarily liable with the
debtor, for the simple reason that it is not one subject of the petition for rehab.
Hence, xxx.

B. The criminal case against Mr. P is not suspended by the commencement order
issued to EFG Inc.
Under Sec. 18 of FRIA, any criminal action against an individual debtor or owner,
partner, director or officer of the debtor shall not be affected by any proceeding
commenced.
Here, the prosecution of the officers has no bearing on the pending rehab of the
insolvent debtor.
Hence, xxx

2018. FRIA; petition for rehab; actions or proceedings against the surety of the
insolvent debtor is not a subject of the stay order; subjects of pet for rehab and stay
order
YFC is correct.
Actions or proceedings against the surety of the insolvent debtor that filed a petition for
rehab are not subject to the stay order.
Hence, the suit may continue against him. S18c FRIA

2017. FRIA; pet for rehab; assets less than liab; pet for liquid appropriate for more liab
than assets
Assuming that Wyatt is registered as sole proprietorship, he may file a petition for rehab
or voluntary liquidation.
Under FRIA, an insolvent debtor may file a petition for rehab even if the assets are less
than the liabilities. The petition should include a rehab plan and nominee for rehab
receiver.
He can also file a petition for voluntary liquidation since his liabilities exceed his assets.
The objective of liquidation is to get a discharge, maximize recovery of assets and effect
equitable distribution of such assets based on the rules on concurrence of credits.

(Assuming that Wyatt is not registered as a sole proprietorship, he may only file a
petition for voluntary liquidation since his assets are less than his liabilities S103 FRIA.
Petition for suspension of payments is not available as a remedy to an individual debtor
not registered as sole proprietorship. )

He can apply for VL. It applies when the ID has properties not sufficient to cover his
liabilities and owing debts exceeding P500,000.
Suspension of payments is not feasible considering it applies only if he possesses
sufficient property to cover all his debts but foresees the impossibility of meeting them
when they respectively fall due.
Here, Wyatt has more liabilities than assets.
Hence, VL voluntary liquidation is the only remedy available to him.

2017. Commencement Order and its effect; Susp all actions or proceedings; susp all
action to enforce any judgt, attacht or other prov remedies ag the D; prohibit the D from
selling, encumbering, transfer or disposing prop except OCB and prohib D making
payment of its liab as of CO;
The rehab proceeding formally commences upon issuance of a commencement order
includes the stay order.
Generally, the same:
1. Suspends all actions or proceedings, in court or otherwise, for the enforcement of
claims against the debtor;
2. Suspends all actions to enforce any judgment, attachment or other provisional
remedies against the debtor;
3. Prohibits the debtor from selling, encumbering, transferring or disposing in any
manner any of its properties except in the ordinary course of business; and
4. Prohibits the debtor from making any payment of its liabilities outstanding as of
the commencement date except as may be provided herein. S16 FRIA

2017. FRIA; company has sep and distinct jurid personality; company officer is not
covered by the rehab proceed; garnishment and levy of officer’s assets not valid.
The garnishment and levy of Matteo’s assets are not valid, because Matteo is not
covered by the rehab proceedings or any stay order that the rehab court may issue.
It is the DRI with legal personality separate and distinct from Matteo, which filed the
petition for rehab and would have been entitled to the effects of any CO with stay order,
that the court may issue.
The CO would have the effect of setting aside any seizure of property or attempt to
enforce a claim against the debtor.

ALT:
The garnishment and levy of Matteo’s assets are lawful and proper provided that DRI’s
legal personality may be pierced to make it one and the same with Matteo and
considering there is no issuance yet of any Commencement Order which necessarily
includes a Stay or Suspension Order which results to, among others, suspension of all
actions to enforce any judgment, attachment or other provisional remedies against the
debtor.

2014. Under FRIA, a majority vote of the BOD and auth by the vote of the SH rep
majority of the OCS.

F. DATA PRIVACY ACT OF 2012

1. Definitions and scope
2. Extraterritorial application
3. Processing of personal information
a. General principles
b. Sensitive and privileged information
c. Subcontracting
d. Privileged communication
4. Rights of the data subject; exceptions/non-applicability

DATA PRIVACY ACT

2019. 2 Rights of data subject under the Data Privacy Act

The data subject has the right to:
1. Be informed whether personal information pertaining to him or her shall ne, are
being, or have been processed and
2. Suspend, withdraw or oder the blocking, removal or destruction of his or her
personal information from the personal information controller’s filling system upon
discovery and substantial proof that the personal information are incomplete,
outdated, false, unlawfully obtained, used for unauthorized purposes or are no
longer necessary for the purposes for which they were collected.

Expect a question about the Data Privacy and National ID System for 2021 Bar.

5. Duties and responsibilities of personal information controller

G. PHILIPPINE COMPETITION ACT

1. Definitions and scope of application
2. Powers and functions of the Philippine Competition Commission
3. Prohibited acts
a. Anti-competitive agreements
i. Per se violations
ii. Not per se violations
b. Abuse of dominant position
c. Prohibited mergers and acquisitions
d. Exceptions
4. Covered transactions
a. Thresholds for compulsory notification
b. Notifying entity
c. Exceptions
5. Determining the relevant market
6. Determining control or dominance of market
7. Determining existence of anti-competitive conduct
8. Forbearance by the Philippine Competition Commission

LIST OF RELEVANT MATERIALS

I. 1987 CONSTITUTION

II. CIVIL CODE OF THE PHILIPPINES on Transportation, Surety, Guaranty, Real Estate
Mortgage, and Concurrence and Preference of Credits

III. LAWS AND REGULATIONS

The Insurance Code
Pre-Need Code of the Philippines
The Salvage Law
Commonwealth Act No. 65 Carriage of Goods by Sea Act (Public Act No. 521)
Commonwealth Act No. Public Service Act
Maritime Commerce Law Relevant provisions of the Code of Commerce
Warsaw Convention Convention for the Unification of
Certain Rules Relating to International Carriage By Air Allowing Foreign Vessels to Transport
and Co-Load Foreign Cargoes for Domestic Transshipment
Revised Corporation Code of the Philippines
Foreign Investments Act of 1991
Investors' Lease Act
The Special Economic Zone Act of 1995
Eleventh Regular Foreign Investment Negative List
The Securities Regulation Code
Law on Secrecy of Bank Deposits
Philippine Deposit Insurance Corporation Act
Truth in Lending Act
The New Central Bank Act
The General Banking Law of 2000
Lending Company Regulation Act of 2007
Intellectual Property Code of the Philippines
Use of Duly-Stamped and Marked Containers
Philippine Regulations Implementing the Protocol Relating to the Madrid
Agreement Concerning the International Registration of Marks of 2017
Real Estate Mortgage Law
Anti-Money Laundering Act of 2000
Financial Rehabilitation and Insolvency Act of 2010
Data Privacy Act of 2012
Personal Property Security Act
Philippine Competition Act