Derivative Suit; Elements of Derivative Suit

Unfair Competition

Pre-emptive Right

The corporation, as a mere artificial being can only act through its representatives. The latter shall not
be liable for corporate debts if they have acted in good faith and within the scope of their authority.
doctrine of separate juridical entity; cannot use this defense for an officer or BOD to evade CRIMINAL
obligations; thus, for criminal liability- if there’d be violation to any penal laws (eg. trust receipts law),
the officer can be liable and cannot raise this defense precisely because a corporation cannot be
imprisoned. Only those offers of Ds/Ts responsible for the violation can be criminally liabe; BUT for civil
liab- only the corporation is liable

doctrine of piercing corporate veil- different concept from above (the next preceding topic)

doctrine of Fair Use; factors to consider; Fair Use of a copyrighted work for criticism, comment,
teaching, research and similar purposes.

tender offer

Insolvency Laws
-Solidary debtors are still liable for the debts of the corporation subject of rehab proceedings
- claims are only suspended from the time of appointment of rehabilitation proceedings; thus claims
filed prior to that and even after the filing of the petition for rehab are deemed not suspended and are
enforceable
- Petition for Suspension of Payments can only be availed of if Assets are still more than Liab, but the
individual debtor only foresees the impossibility of payment of liab when they respectively fall due; only
applicable to individual debtor

Rights of Stockholders

Insider Trading

AMLA- Prior Court Order: Exception for the requirement prior court order for examination (hijacking,
kidnapping, terrorism, murder, arson, Dangerous Drugs) : Freeze order is not the same with Prior Court
order for bank examination, but the former is still issued by the CA; Freeze Order-probable cause that
the subject deposits relate to any of the unlawful activities under AMLA; Money Laundering- is a crime
whereby the proceeds from a crime are transacted making it appear from legitimate sources (but take
note of the specific crimes covered under AMLA: not theft but yes qualified theft); AMLC is an exception
to bank secrecy law- probable cause that the deposits are related to unlawful activity under AMLA

transportation- definition of common carrier; extraordinary diligence- definition in carriage for

passengers, and in carriage for goods; Gratuitous carriage- there can be a stipulation limiting the liability
of the carrier for negligence but NOT for willful acts or gross negligence; bareboar vis contract of
affreightment

Letters of credit: 3 Principles: Doctrine of Independence, Doctrine of Strict Compliance, Fraud Exception;
Role of banks and functions
Foreign Corporation- Doing Business

Insider trading: buying and selling by the insider while in possession of a material non-public info
 does not include communication of material non-public info to someone he or she has
reasonable belief to buy and sell stocks while in possession of such info; in here, the person doing so is
liable but not for insider trading but for disclosing
Material- affect the decision of a reasonable person to buy or sell stocks

Insurance
Incontestability Clause
Suicide; XPNs
Concealment- ONLY material facts KNOWN to the insured at the time of issuance of policy should be
disclosed (hence, of nacure sa cancer at the time of issuance of insurance contract, dili cya liable to
disclose the same)
All-risk Provision- covers all conceivable causes of loss EXCEPT those that are due to fraud or
intentional misconduct by the insured.
Insurable Interest- that interest in which a person have over a subject matter in which he would derive
pecuniary benefits from its preservation or pecuniary loss from its destruction
Insurable Interest in property- existing or legal interest; inchoate right based on an existing interest;
expectancy founded upon an existing interest

IPL
- infringement cases: copyright- registration is not a condition precedent; trademark and patent-
registration is mandatory
- injunction cases- registration is not a prerequisite; even in the absence of such registration, a person
can seek injunctive relief under the doctrine of PRIOR USE.
It is ownership of the trademark the confers the right to register. Registration does not confer
ownership.
Patent- NII; Prior Art- introduced by someone other than the one applying for Registration; Petition ofr
Compulsory licensing

Right to inspect books

Nell Doctrine

DOSRI Transactions