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SPECIAL COMMERCIAL LAWS

(Syllabus)
By: Pros. Paul Agerico B. Avila

I. LETTERS OF CREDIT AND TRUST RECEIPTS (PD 115)

Basic concepts (Definition)

Cases: 1.) Transfield Philippines, Inc. v. Luzon Hydro Corporation, Australia and New Zealand
Banking Group Limited and Security Bank Corporation, G.R. NO. 146717, Nov. 22, 2004.
2.) HSBC vs National Steel Corporation and City Trust Banking Corp (BPI) G.R. No.
183486, February 24, 2016.
3.) MWSS vs Hon. Reynaldo Daway G.R. No.160732, June 21, 2004
4.) Mico Metals Corp. v. Court of Appeals and Philippine Bank of Communications,
G.R. No. 117914, Feb. 1, 2002

a. Doctrine of independence
b. Fraud exception principle
c. Doctrine of strict compliance

Rights and obligations of parties (Trust Receipts)

Cases:1.) Damian Robles vs CA G.R. L-59640, July 15, 1991

2.) Sps Tirso Vintola vs IBAA G.R. 73271, May 29, 1987
3.) Melvin Colinares vs CA G.R. 90828, September 5, 2000
4.) Ramon Abad vs CAG.R. No. L-42735, January 22, 1990
5.) Lee vs Court of Appeals 375 SCRA 579

a. Entruster/entrustee
b. Applicant/banks/beneficiary

Remedies available

II. BANKING

a. The New Central Bank Act (RA 7653, as amended by RA 11211)

1) State Policies
2) Creation of the Bangko Sentral ng Pilipinas
3) Powers and Functions of the Monetary Board
Cases: 1.) BSP Monetary Board vs Valenzuela G.R. No. 184778 (2009)
2.) BSP vs Legaspi G.R. No. 205966 (2016)
3.) Federal Express vs Antonino G.R. 199455 (2018)
4.) Borlongan vs Reyes G.R. No. 161276 (2005)
5.) UCPB vs Ganzon G.R. No. 168859 (2009)
4) Responsibility and primary objective
Cases: 1.) Perez vs Monetary Board 20 SCRA 592
2.) Busuego vs CA G.R. No. 95326 (1999)
3.) Koruga vs Arcenas G.R. No. 168332
4.) BSP vs Banco Filipino G.R. Nos. 178696 & 192607 (2018)
5) Corporate Powers
6) Operations of the Bangko Central ng Pilipinas
i. Authority to obtain data and information
ii. Supervision and examination
1. Development Bank vs COA G.R. No. 88435 (2002)
iii. Bank deposits and investments
iv. Prohibitions
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v. Examination and fees

7) Handling of banks in distress
i. Conservatorship
Cases: 1.) Central Bank vs CA G.R. L-45710 (1985)
2.) Central Bank vs. CA G.R. No. 88353 (1992)
3.) First Philippine International Bank vs. CA, G.R. No. 115849
(1996)
ii. Closure
Cases: 1.) Ramos vs. Central Bank G.R. No. L-29352 (1971)
2.) Central Bank vs. CA, G.R. No. L-50031-32 (1981)
3.) Central Bank vs. CA, 139 SCRA 46 (1985)
4.) Lipana vs. Development Bank, 154 SCRA 257 (1987)
5. Overseas Bank of Manila vs. CA G.R. No. L-45866 (1989)
6.) Banco Filipino vs. Central Bank, G.R. No. 70054 (1991)  Cen
7.) Central Bank vs. CA, 208 SCRA 652 (1992)
8.) Rural Bank of San Miguel vs. Monetary Board, G.R. No.
150886 (2007)
9.) Spouses Poon vs Prime Savings Bank G.R. No. 183794 (2016)
iii. Receivership
Cases:1.) Central Bank vs. CA G.R. No. L-45710 (1985)
2.) Abacus vs. Manila Banking Corp., G.R. No. 162270 (2005)
3.) Vivas, vs. Monetary Board G.R. No. 191424 (2013)
4.) Spouses Chugani v. PDIC G.R. No. 230037(2018)
5.) So v. PDIC G.R. No. 230020 (2018)
6.) Banco Filipino v. BSP G.R. No. 200678 (2018)
iv. Liquidation
Cases: 1.) Salud vs. Central Bank G.R. No. L-17620 (1986)
2.) Jerry Ong vs. CA, G.R. No. 112830 (1996)
3.) Domingo Manalo vs. CA G.R. No. 141297 (2001)
4.) Rural Bank of Sta. Catalina vs. LBP G.R. No. 148019 (2004)
5.) Miranda vs. PDIC G.R. No. 169334 (2006)
6.) In Re : Petition for Assistance in the Liquidation in the Rural
Bank of Bokod (Benguet), PDIC vs. BIR, 511 SCRA 123 (2006)
7.) Cu v. Small Business Guarantee and Finance Corp., G.R. No.
211222 (2017)
8.) Apex v. BSP & PDIC G.R. No. 214866 (2017)
8) Administrative sanctions on supervised entities
9) Rules on bank deposits and investments by directors, officers,
stockholders and their related interests
10) Supervision and regulation of bank operations
i. Loans and other credit accommodations
ii. Selective regulation
1. Margin requirement against letters of credit
2. Required security against bank loans
3. Portfolio ceilings
4. Minimum capital ratios
11) Rate of exchange

b. Secrecy of bank deposits (RA 1405, as amended, and RA 6426, as amended)

1) Purpose
i. BSB Group, Inc. vs. Sally Go, G.R. No. 168644, 2010
2) Prohibited acts
i. Oñate vs. Abrogar, G.R. No. 107303, February 23, 1995
ii. Philippine Commercial International Bank vs. Court of Appeals,
255 SCRA 299 (1996)
iii. Union Bank of the Philippines vs. Court of Appeals, G.R. No.
134699, December 23, 1999
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3) Deposits covered
i. Intengan vs. Court of Appeals, G.R. No. 128996, February 15,
2002
ii. Ejercito vs. Sandiganbayan, G.R. Nos. 157294-95, November 30,
2006
iii. Sibayan v. Alda, G.R. No. 233395, [January 17, 2018]
4) Exceptions from coverage
i. PNB vs. Gancayco, 15 SCRA 91 (1965)
ii. Banco Filipino Saving and Mortgage Bank vs. Purisima, 161
SCRA 576 (1988)
iii. RCBC vs. De Castro, G.R. No. L-34548, November 29, 1988
iv. Mellon Bank, N.A. vs. Magsino, G.R. No. 71479, October 18,
1990
v. PCIB vs. Court of Appeals, G.R. No. 84526, January 28, 1991
vi. Van Twest vs. Court of Appeals, 230 SCRA 42 (1994)
vii. Marquez vs. Desierto, G.R. No. 135882, June 27, 2001; Office of
the Ombudsman vs. Ibay, G. R. No. 137538, September 3, 2001
viii. China Bank Corporation vs. Court of Appeals 511 SCRA 110
(2006)
ix. BSB Group, Inc.,vs. Sally Go, G.R. No. 168644, February 16,
2010
x. Rizal Commercial Banking Corporation vs. Hi-Tri Development
Corporation, 672 SCRA 514 (2012)
xi. Dona Adela Export International Inc., vs. Trade and Investment
Development Corporation and the Bank of the Philippine Islands,
G.R. No. 201931, February 11, 2015
xii. Intengan vs CA G.R. No. 128996 (2002)
xiii. Ejercito vs Sandiganbayan G.R. 157294-95 (2006)
xiv. Salvacion vs Centra Bank G.R. No. 94723 (1997)
5) Garnishment of deposits, including foreign deposits
i. De la Rama vs. Villarosa, 8 SCRA 413 (1963)
ii. PCIB vs. Court of Appeals, G.R. No. 84526, January 28, 1991 
Salvacion vs. Central Bank of the Philippines, G.R. No. 94723,
August 21, 1997
iii. GSIS vs. CA G.R. NO. 189206, June 8, 2011
6) Penalties for violation

c. General Banking Law of 2000 (RA 8791)

1) Definition and classifications of banks
i. Republic of the Philippines vs. Security Credit and Acceptance
Corporation, G.R. No. L-20583, January 23, 1967
2) Distinctions of banks from quasi-banks and trust entities
i. Teodoro Bañas vs. Asia Pacific Finance Corporation, G.R. No.
128703, October 18, 2000
ii. First Planters Pawnshop, Inc.,vs. Commissioner of Internal
Revenue, G.R. No. 174134, July 30, 2008
3) Bank powers and liabilities
i. Corporate powers
1. Register of Deeds of Manila vs. China Banking
Corporation, 4 SCRA 1145 (1962)
2. Banco de Oro-EPCI, Inc. vs. JAPRL Development
Corporation, G.R. No. 179901, April 14, 2008
ii. Banking and incidental powers
1. Spouses Raul and Amalia Panlilio vs. Citibank, N.A., G.R.
No. 156335, November 28, 2007
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2. White Marketing Development Corporation Vs Grandwood

Furniture & Woodwork, Inc., Respondent. (G.R. No.
222407 (2016)

4) Nature of bank funds and bank deposits

i. Consolidated Bank and Trust Corporation vs. Court of Appeals,
G.R. No. 138569, September 11, 2003
ii. Suan vs. Gonzales, 518 SCRA 82 (2007)
iii. BPI vs CA G.R. No. 104612 (1994)
iv. Gullas vs PNB G.R. No. L-43191 (1935)
v. PNB vs CA G.R. No. 118357 (1997)

5) Diligence required of banks in view of the fiduciary nature of banking

i. Pacific Bank vs. Hart, 173 SCRA 102 (1989)
ii. Simex International (Manila) Inc. vs. Court of Appeals, 183 SCRA
360 (1990)
iii. Luzan Sia vs. Court of Appeals, G.R. No. 102970, May 13, 1993
iv. Gregorio Reyes vs. Court of Appeals, G.R. No. 118492, August
15, 2001
v. Consolidated Bank and Trust Corporation vs. Court of Appeals,
G.R. No. 138569, September 11, 2003
vi. Citibank, N.A. vs. Spouses Luis & Carmelita Cabamongan, G.R.
No. 146918, May 2, 2006
vii. Philippine Savings Bank vs. Chowking Food Corporation, G.R.
No. 177526, July 4, 2008
viii. Philippine National Bank vs. Erlando T. Rodriguez, et. al., G.R.
No. 170325, September 26, 2008
ix. Central Bank of the Philippines vs. Citytrust Banking Corporation,
G.R. No. 141835, February 4, 2009
x. Bank of America, NT and SA vs. Associated Citizens Bank, G.R.
No. 141018, May 21, 2009
xi. Equitable PCI Bank vs. Arcelito B. Tan, G.R. No. 165339, August
23, 2010
xii. Comsavings Bank vs. Spouses Danilo and Estrella Capistrano,
G.R. No. 170942, August 28, 2013
xiii. Land Bank of the Philippines vs. Emmanuel Oñate, G.R. No.
192371, January 15, 2014
xiv. Development Bank of the Philippines vs. Guariña Agricultural and
Realty Development Corporation, G.R. No. 160758, January 15,
2014
xv. UCPB vs Ramos G.R. No. 147800 (2003)
xvi. Philippine Commercial Bank vs Balmaceda G.R. No. 158143
(2011)
xvii. Alano vs Planter’s Bank G.R. No. 171628 (2011)
xviii. Hacienda Luisita vs Presidential Agrarian Reform Council G.R.
No. 171101 (2011)
xix. Cagungun vs Planter’s Development Bank G.R. No. 158674
(2005)- On bank’s liability for moral damages.

6) Grant of loans and security requirements

i. Ratio of net worth to total risk assets
ii. Single borrower’s limit
iii. Prohibited transactions by bank directors and officer
1. Banco de Oro vs. Bayuga, 93 SCRA 443 (1979)
2. People vs. Jalandoni, 122 SCRA 588 (1983)
3. Jose C. Go vs. BSP, G.R. No. 178429, October 23, 2009
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4. Hilario P. Soriano vs. People of the Philippines, et. al., G.R.

No. 162336, February 1, 2010
5. Republic of the Philippines vs. Sandiganbayan, et. al., G.R.
No. 166859/G.R. No. 169203/G.R. No. 180702, April 12,
2011
iv. Prohibited acts of borrowers

v. Floating interest rates and escalation clauses

7) Stipulation on Interest

i. Fidelity Savings and Mortgage Bank vs. Hon. Pedro Cenzon, G.R.
No. L-46208, April 5, 1990
ii. Ileana Macalinao vs. Bank of the Philippine Islands, G.R. No.
175490, September 17, 2009
iii. Heirs of Estelita Burgos-Lipat namely: Alan B. Lipat and Alfredo
B. Lipat, Jr. vs. Heirs of Eugenio D. Trinidad namely: Asuncion R.
Trinidad, et. al., G.R. No. 185644, March 2, 2010
iv. Asia Trust Development Bank vs. Carmelo H. Tuble, G.R. No.
183987, July 25, 2012
v. Advocates for Truth in Lending vs. BSP, G.R. No. 192986,
January 15, 2013
vi. Villa Crista Monte Realty & Development Corp. v. Equitable PCI
Bank, G.R. No. 208336, [November 21, 2018]
vii. Rey v. Anson, G.R. No. 211206, [November 7, 2018]
8) Penalties for violation

i. Fine/Imprisonment

ii. Suspension or removal of director or officer

iii. Dissolution of bank

d. Philippine Deposit Insurance Corporation Act (RA 3591, as amended)

1) Basic Policy
i. Chugani vs PDIC G.R. 230037 (2018)
2) Powers and functions of PDIC; prohibitions
3) Concept of insured deposits
4) Liability to depositors
i. Deposit liabilities required to be insured with the PDIC
1. PDIC vs CA G.R. No. 118917 (1997)
2. PDIC vs CA G.R. No. 126911 (2003)
ii. Commencement of liability
iii. Deposit accounts not entitled to payment
iv. Extent of Liability
v. Determination of insured deposits
vi. Calculation of liability
1. Per depositor, per capacity rule
2. Joint accounts
3. Mode of payment
4. Effect of payment of insured deposits
5. Payment of insured deposits as preferred credit
6. Failure to settle claim of insured depositor
a. Examination of banks and deposit accounts
b. Prohibition against splitting of deposits
i. So vs PDIC G.R. No. 230020 (2018)
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c. Prohibition against issuances of temporary

restraining orders
7. Concept of bank resolution
8. Role of the PDIC in relation to bank in distress
a. Closure and takeover
b. Conservatorship
c. Receivership
d. Liquidation

III. ANTI-MONEY LAUNDERING ACT (RA 9160, as amended)

a. Policy of the law
b. Covered institutions and their obligations
c. Covered and suspicious transactions
1) Republic of the Philippines vs. Glasgow Credit and Collection Services,
Inc., G.R. No. 170281, January 18, 2008
2) Republic of the Philippines vs. Hon. Antonio Eugenio, G.R. No. 174629,
February 14, 2008
3) Republic vs Bolante et al. G.R. No. 186717, April 17, 2017
4) Philippine Deposit Insurance Corp. v. Gidwani, G.R. No. 234616, [June
20, 2018]
d. Safe harbor provision
e. When is money laundering committed (including predicate crimes)
f. Authority to inquire into bank deposits
1) Forfeiture provisions
2) Mutual assistance among states
g. Freezing and forfeiture
1. Republic vs Eugenio 545 SCRA 384
2. Republic vs Glasgow Credit 542 SCRA 95
2) Who may apply
3) Effectivity
4) Duties of covered institutions
1. Republic of the Philippines vs. Cabrini Green & Ross, Inc., G.R.
No. 154522, May 5, 2006
2. Ret. Lt. Gen. Jacinto Ligot, et. al. vs. Republic of the Philippines,
G.R. No. 176944, March 6, 2013
3. Subido vs CA G.R. No. 216914 (2016)
h. AMLA Council; functions

IV. TRUTH IN LENDING ACT

a. Purpose
b. Obligation of creditors to person to whom credit is extended
c. Covered and excluded transactions
d. Consequences of non-compliance with obligation
1) DBP vs Arcilla G.R. 161397 (2005)
2) Consolidated vs CA 246 SCRA 195
3) New Sampaguita Builders vs PNB 435 SCRA 565

V. ELECTRONIC COMMERCE ACT (RA 8792)

a. Legal recognition of electronic data messages, documents, and signatures
1) MCC vs Ssangyong Corportion G.R. No. 170633 2007
b. Presumption relating to electronic signatures
c. Admissibility and evidential weight of electronic data message or electronic
document
1) NPC vs Codilla G.R. No. 170419 (2007)
2) RCBC vs Oracion G.R. No. 223274 (2019)
3) Torres vs PAGCOR G.R. 193531 (2011)
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d. Obligation of confidentiality

VI. DATA PRIVACY ACT (RA 10173)

a. Definitions and scope
b. Extraterritorial application
c. Personal vs. sensitive personal information
d. Scope
e. Processing of personal information
1) General principles
2) Sensitive and privileged information
3) Subcontracting
4) Privileged communication
f. Rights of data subject
g. Duties and responsibilities of personal information controller

VII. FINANCIAL REHABILITATION, INSOLVENCY, LIQUIDATION

and SUSPENSION OF PAYMENTS (RA 10142, FR Rules [A.M. No.
12-12-11-SC], and FLSP Rules [A.M. No.15-04-06-SC])
a. Basic concepts
1) Rehabilitation
2) Insolvent
3) Liquidation
4) Suspension of payments
b. Modes of rehabilitation
1) Court-supervised rehabilitation
a. Voluntary vs. involuntary
b. Commencement order (including stay order)
c. Rehabilitation receiver and management committee
d. Determination of claims
e. Rehabilitation plan
i. Concept of feasibility
ii. Material financial commitments
iii. Liquidation analysis
f. Creditor approval and confirmation
g. Failure of rehabilitation
2) Pre-negotiated rehabilitation
a. How initiated
b. Period and effect of approval
3) Out-of-Court or Informal Restructuring Agreement or Rehabilitation Plan
a. Minimum requirements
b. Standstill period
c. Cram down effect
c. Liquidation
1) Voluntary liquidation vs. involuntary liquidation vs. conversion
2) Procedure
a. Liquidation order; effects
3) Determination of claims
d. Suspension of Payments; Suspension of Payment Order
e. Remedies
1) Motion for reconsideration
2) Petition for certiorari

CASES:
o Tyson’s Super Concrete, Inc. vs. Court of Appeals 461 SCRA 69 (2005)
o Spouses Sobrejuanite vs. ASB Development Corporation 471 SCRA 763 (2005)
o Sy Chim vs. Sy Siy Ho & Sons, Inc., 480 SCRA 465 (2006)
o Ao-As vs. CA 491 SCRA 339 (2006)
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o Danilo G. Punongbayan vs. Perfecto G. Punongbayan, Jr. 491 SCRA 581 (2006)
o New Frontier Sugar Corporation vs. RTC of Ilo-ilo and Equitable PCI Bank, 513
SCRA 601 (2007)
o Philippine Airlines vs. Zamora 514 SCRA 584 (2007)
o Union Bank of the Philippine vs. ASB Devt. Corp., 560 SCRA 578 (2008)
o China Banking Corporation vs. ASB Holdings, Inc., 575 SCRA 247 (2008)
o Garcia vs. Philippine Airlines. G.R. No. 164856 576 SCRA 479 (2009)
o Malayan Insurance Company, Inc. vs. Victorias Milling Company, Inc. 586
SCRA 45 (2009)
o Puerto Azul Land Inc. vs. Pacific Wide Realty Development Corporation, G.R.
No. 184000, September 17, 2014
o Robinson’s Bank Corporation vs. Hon. Samuel H. Gaerlan, G.R. No. 195289,
September 24, 2014
o Philippine Bank of Communications vs. Basic Polyprinters and Packaging
Corporation, G.R. No. 187581, October 20, 2014
o Marilyn Victorio-Aquino vs. Pacific Plans Inc., and Mamareto A. Marcelo Jr.,
G.R. No. 193108, December 10, 2014
o Mervic Realty, Inc. And Viccy Realty, Inc., Petitioners, V. China Banking
Corporation, Respondent. (G.R. No. 193748, February 03, 2016, Brion, J.)
o Metrobank Vs. Liberty Corrugated (Gr 184317, January 25 2017, J. Leonen)
o Land Bank Of The Philippines V. West Bay Colleges, Inc., Pbr Management And
Development Corp. And Bcp Trading Co., Inc., G.R. No. 211287, April 17, 2017,
Third Division, Reyes, J.:
o Bureau Of Internal Revenue, Assistant Commissioner Alfredo V. Misajon, Group
Supervisor Rolando M. Balbido, And Examiner Reynante Dp. Martirez
V.Lepanto Ceramics, Inc., G.R. No. 224764, April 24, 2017, First Division,
Perlas-Bernabe, J.
o People Of The Philippines V. Ervin Y. Mateo, Evelyn E. Mateo, Carmelita B.
Galvez, Romeo L. Esteban, Galileo J. Saporsantos And Nenita S. Saporsantos,
Ervin Y. Mateo, G.R. No. 210612, October 9, 2017, Second Division, Peralta, J.
o Steel Corporation Of The Philippines V. Bureau Of Customs, G.R. No. 220502,
[February 12, 2018]

VIII. FOREIGN INVESTMENTS ACT

a. Policy of the law
b. Definition of terms
1) Foreign investment
2) “doing business” in the Philippines
1. Alfred Hahn vs. Court of Appeals, G.R. No. 113074, January 22,
1997
2. Eriks Pte. Ltd. vs. Court of Appeals, G.R. No. 118843, February 6,
1997
3. Agilent Technologies Singapore (Pte.) Ltd. vs. Integrated Silicon
Technology Philippines Corporation, G.R. No. 154618, April 14,
2004
4. Steelcase, Inc. vs. Design International Selections, Inc., G.R. No.
171995, April 18, 2012
3) Export enterprise
4) Domestic market enterprise
c. Registration of investments of non-Philippine nationals
d. Foreign investments in export enterprises
e. Foreign investments in domestic market enterprises
f. Foreign Investments Negative List
1. Heirs of Wilson Gamboa vs. Finance Secretary Margarito Teves,
G.R. No. 176579, October 9, 2012
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IX. COMPETITION LAW (R.A. 10667)

a. Definitions and scope of application
b. Powers and functions of the PCC
c. Prohibited acts
1) Anti-competitive agreements
1. Per-se violations
2. Non per-se violations
2) Abuse of dominant positions
3) Prohibited mergers and acquisitions
4) Exceptions
d. Covered transactions
1) Thresholds for compulsory notification
2) Notifying entity
3) Exceptions
e. Determining the relevant market
f. Determining control or dominance market
g. Determining existence of anti-competitive conduct
h. Forbearance by the PCC

Cases: GIOS-Samar vs DOTC G.R. NO. 217158, March 12, 2019.