On July 7, 2011, the Board of Directors of the PDIC adopted Resolution No.

2011-03-032 approving the conduct of an investigation, on the basis of the

Reports of Examination of the Bangko Sentral ng Pilipinas (BSP) on ten (10)
banks, one of which was Islands Bank. The said resolution also created a
Special Investigation Team to conduct the said investigation, with
the authority to administer oaths, to examine, take and preserve testimony
of any person relating to the subject of the investigation, and to examine
pertinent bank records. When the notice of investigation was served on
Islands Bank, however, the investigators from the PDIC Investigation Team
were refused entry on the ground that the PDIC’s investigatory power cannot
be differentiated from the examination powers which requires prior approval
from the Monetary Board. Is Islands Bank correct?

SUGGESTED ANSWER:
No. Monetary Board approval is not required for the PDIC to
conduct investigations on banks. Examination covers a wider
scope than that of investigation. An Investigation does not
involve a general evaluation of the status of a bank while an
examination entails a review of essentially all of the functions
and assets of a bank and its operation. For this reason, an
examination of banks requires the prior consent of the
Monetary Board, whereas, an investigation based on an
examination report, does not. Hence, Islands Bank is incorrect
(PDIC v. Philippine Countryside Rural Bank, Inc. GR No.
176438, January 24, 2011).

How is the existence of an anti-competitive conduct

determined?

SUGGESTED ANSWER:
According to Sec. 26 o the Philippine Competition Act, in
determining whether anti-competitive agreement or conduct
has been committed, the Philippine Competition Commission
shall: (a) Define the relevant market allegedly affected by the
anti-competitive agreement or conduct, following the principles
laid out in Section 24 of the Act; (b) Determine if there is actual
or potential adverse impact on competition in the relevant
market caused by the alleged agreement or conduct, and if
such impact is substantial and outweighs the actual or potential
efficiency gains that result from the agreement or conduct; (c)
Adopt a broad and forward-looking perspective, recognizing
future market developments, any overriding need to make the
goods or services available to consumers, the requirements of
large investments in infrastructure, the requirements of law,
and the need of our economy to respond to international
competition, but also taking account of past behavior of the
parties involved and prevailing market conditions; (d) Balance
the need to ensure that competition is not prevented or
substantially restricted and the risk that competition efficiency,
productivity, innovation, or development of priority areas or
industries in the general interest of the country may be
deterred by overzealous or undue intervention; and (e) Assess
the totality of evidence on whether it is more likely than not
that the entity has engaged in anticompetitive agreement or
conduct including whether the entity’s conduct was done with a
reasonable commercial purpose such as but not limited to
phasing out of a product or closure of a business, or as a
reasonable commercial response to the market entry or conduct
of a competitor.

Johnny filed a petition for suspension of payment. He has 6

creditors, and the aggregate amount of the debt is
PhP15,000.00. How many votes are necessary to approve the
proposition of Johnny to his creditors?

SUGGESTED ANSWER:
The Financial Rehabilitation and Insolvency Act provides that in
suspension of payments a double majority vote of the creditors
is necessary to approve the proposition of the debtor. Such
double majority vote necessary to approve the proposed
agreement refers to: a) two-thirds of the creditors voting upon
the same proposition; and b) the claims represented in said
vote amount to at least three-fifths of the liabilities. Applying
this, the vote necessary to approve Johnny’s proposition is two-
thirds of the number of creditors or at least 4 creditors whose
total claim should amount to three-fifths of the total liabilities
or at least PhP 9,000.00.

Andres, Bong, and Carlos entered into an agreement (embodied

in a public instrument) wherein Andres and Bong would
contribute land which was to be developed into a subdivision
while Carlos would contribute his technical expertise and efforts
in developing and marketing the subdivision. The land would
then be sold to the public and Andres and Bong would be
entitled to 60% and Carlos 40% of the sales proceeds. Pursuant
to the agreement the land was mortgaged to a bank and the
loan proceeds were used to develop the land. The subdivision
project flopped because adverse claims on the lots scared away
buyers. The bank eventually foreclosed on the land. Andres and
Bong sued Carlos for the latter to bear a part of the losses. Is
Carlos liable to bear a part of the losses?

SUGGESTED ANSWER:
No, Carlos is not liable to bear a part of the losses. Under the
Civil Code provisions on Partnership, an industrial partner is not
liable for losses of the partnership (Art. 1797). Here, there was
a partnership among Andres, Bong and Carlos because they
agreed to contribute property or industry to a common fund
with the intention of dividing the profits among themselves.
Carlos is an industrial partner since he contributed only his
industry or expertise. Hence, Carlos is not liable for the
partnership’s losses.
BFF Corp. is engaged in the microlending business in Naga City.
In order to expand its business to the whole province of
Camarines Sur, BFF Corp. decided to attract investors and
issued Promissory Notes each in the amount of P200,000.00
where it obligated itself to pay the holder a 35% return on
investment within one month. Around 200 investors were
enticed and participated in this scheme. However, not one of
them realized any of the profits promised within one month. Did
BFF Corp. violate any law with this scheme?

SUGGESTED ANSWER:
Yes. BFF Corp violated the provisions of the Securities
Regulation Code, which prohibit the sale of securities, such as
promissory notes, to the public without a registration statement
filed with and approved by the Securities and Exchange
Commission.

Malakas Department Store had an existing fire insurance

coverage over its department store issued by ABC Insurance
Company. The fire insurance policy was good for one year. ABC
Insurance Company had been the insurer of Malakas for several
years. The practice between Malakas and ABC Insurance was
that Malakas was granted a 60-day credit term (that is, 60 days
from the expiration of the policy) for the payment of the
premiums to renew the policy. The fire policy expired on 22 May
2006. On 25 May 2006 ABC Insurance called up Malakas and
informed the latter that it was cancelling and no longer
renewing the policy. On 12 June 2006 a fire razed the Malakas
Department Store to the ground. Two days later Malakas filed a
notice of loss and claim upon the policy. ABC denied the claim
stating that (a) the policy had already been cancelled and that
(b) the fire policy was not valid and binding since the premiums
to renew the policy had not been paid. May Malakas recover
against ABC Insurance on the fire policy?
SUGGESTED ANSWER:
Yes, Malakas may recover against ABC Insurance on the fire
policy. ABC’s denial on the ground that the policy had already
been cancelled is without merit. Under the Insurance Code, the
insurer’s cancellation in order to be valid must be in writing.
Here, the cancellation made by ABC was merely oral or by a
telephone call. Hence, the cancellation was not valid.
Furthermore, ABC’s denial on the ground that the fire policy
was not valid and binding since the renewal premiums had not
been paid is also without merit. The Supreme Court has held
that an exception to the rule that payment of premiums is
required to make a policy valid and binding is when the parties
agree to a credit extension of the premium due (UCPB General
Insurance Co. v. Masagana Telemart, 4 April 2001). Here, there
was a practice between the parties that the insured would have
a 60-day credit extension. The policy is thus valid and binding
notwithstanding the nonpayment of the premiums. Hence,
Malakas may recover on the fire policy.

Donald Cheng was a businessman who owned and operated a

fleet of passenger buses and cargo trucks that plied the routes
from Metro Manila to Southern Luzon. One afternoon, while on
the way to Camarines Sur, one of his cargo trucks carrying
various electronics was hailed and blocked by a group of men
along the road in Quezon Province. When the men told the
driver that they were going to hi-jack the vehicle and seeing
that they clearly outnumbered him, the truck driver
immediately jumped out, gave up possession of the truck and
ran towards his safety. Now the owner of the cargo, Magno
Uno, is suing Donald Cheng for the full value of the goods in the
hi-jacked truck. Should Donald Cheng be held liable for the loss
of the goods?
SUGGESTED ANSWER:
Yes. Under the law, by virtue of the requirement for common
carriers to exercise extraordinary diligence, they are presumed
to be responsible for any loss or damage on the goods they
carry unless it falls under any of the excepting circumstances
provided for in the law. Hi-jacking, theft, or robbery are not
among those circumstances, although the Supreme Court has
considered as an exception when a robbery is attended by
grave irresistible threat, violence or force. The case at bar
involves hi-jacking which is not among the excepting
circumstances in the law. Since the driver immediately gave up
possession, without the application of grave threat or force, the
case also will not fall under the additional exemption provided
by the Supreme Court. Hence, Donald Cheng should be held
liable for the loss of the goods (De Guzman vs CA G.R. No.
L-47822 December 22, 1988).

The Board of Directors of Double Dragon Corporation passed a

resolution providing for compensation to some members of the
board who were also officers of the corporation. This was
objected to by the minority stockholders on the ground that the
members of the board of directors should not receive
compensation. Was such resolution valid?
SUGGESTED ANSWER:
Yes. The prohibition against granting compensation to directors/
trustees of a corporation is not a sweeping rule. The law
provides that the “directors shall not receive compensation, as
such directors”. The implication is that members of the board
may receive compensation, in addition to reasonable per diems,
when they render services to the corporation in a capacity other
than as directors/trustees. In this case, the resolution granted
compensation to the recipients not in their capacity as
members of the board, but rather as officers of the corporation
(Western Institute of Technology vs. Salas, 278 SCRA 216).
Ripple was a common carrier, who owned a fleet of ships
engaged in the carriage of passengers. One day, Stellar
approached him asking, if he could charter one of his ships as
Stellar needed to transport a number of his employees to a
remote island for a company retreat. Ripple agreed to execute
a charter contract with Stellar, wherein Ripple would grant
Stellar the use of one of his ships for a week, but Stellar would
be the one responsible for hiring a ship captain, decide which
route to take, buying the fuel, and all other necessities. On the
way to the retreat, the ship figured in an accident causing
injuries to one of the passengers. Trying to reduce his liabilities,
Stellar went to Ripple claiming that since the latter owned the
ship, he is liable to the injured passengers as a common carrier.
Is Ripple liable as a common carrier?

SUGGESTED ANSWER:
No. Under the law, a common carrier is generally liable for
injuries caused to its passengers. However, when a common
carrier charters his vessel under a contract of demise or
bareboat charter, he strips himself of liability as a common
carrier. Under this form of contract, the owner of the vessel
relinquishes all control over the vessel in favor of the charter
and as discussed in several cases decided by the Supreme
Court, the owner is no longer considered as a common carrier
with regard to the voyage under the contract. This is in contrast
to a mere contract of affreightment where the charter only
leases a certain portion of space of the owner’s ship and the
latter continues to be a common carrier. In the case at bar,
Ripple and Stellar entered into a contract of demise, since
Ripple relinquished control over his ship over to Stellar
completely. It was even Stellar who had to secure the services
of a ship captain and procure all other necessary requirements
for the voyage. Hence, Rippleis not liable as a common carrier
(Coastwise Lighterage Corp. v. Court of Appeals, G.R. No.
114167 (Resolution), July 12, 1995).

Mabuhay Development Corp. purchased several pieces of

equipment from Ang Tibay Machinery Inc. for a total purchase
price of P10 million payable in one year. Mabuhay issued certain
promissory notes in favor of Ang Tibay to cover the said
purchases. However, Mabuhay was unable to pay back the
notes at the time of their maturity. Because of Mabuhay’s
continued failure to pay back the loan despite repeated
demands, Ang Tibay filed a complaint for sum of money before
the Regional Trial Court. On April 5, 2002, the Regional Trial
Court ordered Mabuhay to pay the amounts indicated in the
promissory notes plus interests and penalties. Mabuhay
appealed the RTC ruling to the CA and on June 25, 2020, the
CA denied the appeal. Mabuhay filed a motion for
reconsideration of the CA decision on the ground that the action
must be abated considering that the Securities and Exchange
Commission has revoked Ang Tibay’s certificate of registration
on May 31, 2015 and that no trustee or receiver has been
appointed to continue the suit. Mabuhay cited the Corporation
Code which states that a corporation whose existence has been terminated
may continue as a body corporate for a period of three years for purposes of
liquidation. Is the suit considered abated by the revocation by the SEC of Ang
Tibay’s certificate of registration?

SUGGESTED ANSWER:
No. Mere revocation of the charter of a corporation does not
result in the abatement of proceedings filed by the said
corporation. Generally, a defunct corporation loses the right to
sue and be sued in its name upon the expiration of three years
after its corporate existence is terminated. However, the
Supreme Court has carved out an exception to this rule. An
appointed receiver, an assignee, or a trustee may institute suits
or continue pending actions on behalf of the corporation, even
after the three-year winding-up period. As held by the Supreme
Court, in the absence of a receiver or an assignee, suits may be
instituted or continued by a trustee specifically designed for a
particular matter and that the board of directors of a
corporation may be considered trustees by legal implication for
the purpose of winding up corporate affairs. Here, since Ang
Tibay’s directors are considered trustees by legal implication,
the fact that the corporation did not convey its assets to a
receiver or assignee was of no consequence. Hence, the suit
cannot be considered as abated by the revocation of Ang
Tibay’s certificate of registration (Reyes vs. Bancom
Development Corp., GR 190286, January 11, 2018).

Mariano is a financial whiz and is the corporate secretary of

Mamayana Preneed Corporation for the last 20 years. One day,
his son, Macario asked him about the financial health of Udenna
Company. Mariano answered that Udenna is a very profitable
company and that in fact, Mamayana invests 3% of its trust
fund in Udenna, which yields an average of 12%-18% per year.
He also told him about the corporate strategic direction that
Udenna will pursue in the next 5 years, which was presented by
Udenna to the board of Mamayana. Excited about his father’s
disclosure, Macario requested Mariano to set him up an
appointment with their family’s financial planner as he plans to
invest his hard-earned 10 million pesos into Udenna. Upon
hearing this, Mariano got angry and prohibited Macario from
investing 10 million pesos to Udenna. Mariano then told his son
to choose another company to invest in and stormed out of the
room. Confused, Macario consulted you, a corporate lawyer,
about his plan to invest in Udenna and his father’s attitude
towards it. What will you tell him?

SUGGESTED ANSWER:
I will advise Macario not to invest more than 5 Million pesos in
Udenna Company. Section 13 of the Pre-Need Code prohibits
the relatives of directors or officers of a pre-need company
within the 4th degree of consanguinity or affinity from having an
investment of more than 5 Million pesos in any corporation or
business undertaking in which the pre-need company’s trust
fund has an investment in or has a financial interest with during
the incumbency or term of the director or officer involved. As
disclosed by Mariano, Mamayana invests its trust fund in
Udenna. Thus, Macario, being the son of Mariano, the corporate
secretary of Mamaya, is prohibited from investing more than 5
Million pesos in Udenna.

ABC Corp. is a company which shares are listed in the Philippine

Stock Exchange. In 2015, 25% of ABC Corp.'s shareholdings
were acquired by XYZ, Inc., while 40% of the same were
acquired by RST, Inc., both of which are nonlisted private
corporations. Meanwhile, the remaining 35% of ABC Corp.'s
shareholdings are held by the public. In 2018, or three years
(3) after it acquired its 25% stake in ABC Corp., XYZ, Inc.
sought to obtain an additional 12% shareholding in ABC Corp.
by purchasing some of the shares owned by RST, Inc. therein.
The new acquisition will not, however, result in XYZ, Inc.
gaining majority control of ABC Corp.'s Board. Is XYZ, Inc.
required to conduct a tender offer?

SUGGESTED ANSWER:
No, XYZ, Inc is not required to conduct a tender offer. Under
the Law on Securities, a tender offer is required to be
conducted only when a person or group of persons intends to
acquire at least 35% of the shares of the target public
corporation in a one-time transaction or intends to acquire at
least 35% of the shares over a period of 12 months or when
the purchase would result in ownership of over 50% of the total
outstanding shares of the target corporation. Here XYZ intends
to acquire only 12% of the shares of the target public
corporation ABC Corp. Even if the total acquisition reached 37%
of the shares of ABC Corporation, such acquisition was not done
within a period of 12 months. The acquisition also did not result
in gaining majority control or over 50% of the total shares of
the target corporation. Hence, tender offer is not required.

To complete his look as a hotshot lawyer, Marco decided to buy

a brand new bulletproof black SUV. He financed the purchase by
getting an Auto Loan with Savings Bank. He was supposed to
pay the loan in 60 monthly installments. But just on the first
year, he was already unable to meet the monthly payments.
He, thus, asked BDO for a restructuring of the loan. BDO
agreed as it did not want to antagonize a lawyer but in order to
protect itself, aside from the loan agreement, BDO also asked
Marco to sign a promissory note. One year after, Marco was
again defaulting on the monthly payments. In BDO’s demand
letters to him he noticed that he was being charged with a 1%
monthly penalty. He looked at the disclosure statement of the
restructured loan and no mention of any monthly penalty was
stated therein. He, thus, sued BDO for violation of the truth in
lending act. BDO, however, asserted that while the 1% monthly
penalty charge was not in the disclosure statement, the same
can be found in the promissory note signed by Marco. Marco
insisted that while that may be true, the truth in lending act
specifically requires full disclosure of the true amount of the
loan in the disclosure statement. Resolve.

SUGGESTED ANSWER:
Marco’s argument is untenable. Jurisprudence has settled that
although penalty charges are not stated in the disclosure
statement, reference to the penalty charges in promissory
notes signed by the debtor constitutes substantial compliance
with the disclosure requirement of the truth in lending act.
Hence, BDO is not in violation of the law (BPI v. Sps. Yu, G.R.
No. 184122, 20 January 2010).

Teacher Rosa’s husband was a victim of extrajudicial killing. As

she did not have money for funeral expenses, she loaned
PhP100,000 for a five-year term from Rica with her payroll
account deposit in Landbank as collateral. She also turned-over
to Rica her ATM for that payroll account. Rica immediately had
Teacher Rosa execute a Security Agreement and the same was
registered with the Land Registration Authority. However, as all
her time was consumed by her quest to find justice for her
husband, Teacher Rosa was eventually fired by her school.
After 5 years, Rica sought to collect from Teacher Rosa but she
cannot anymore locate her. Thus, Rica went to Landbank to
enforce her security interest over Teacher Rosa’s payroll deposit
account. But she was informed by Landbank that the payroll
account had become dormant and all of the money therein
were eaten by bank charges. Does Rica have a cause of action
against Landbank?

SUGGESTED ANSWER:
No. Section 6.02 (d) of the Implementing Rules and Regulations
of the Personal Property Security Act states that “any rights to
set-off that the deposit-taking institution may have against a
grantor’s right to payment of funds credited to a deposit
account shall have priority over a security interest in the
deposit account.” As such, Landbank may validly set-off the
bank charges against Teacher’s Rosa’s account despite the
existence of Rica’s security interest as the bank charges has
priority of payment. Hence, Rica does not have a cause of
action against Landbank.
From his first term in 2009, Congressman Kafuerte has been
endorsing his pork barrel allocations to Tugawe Rivers in
exchange for a commission of 40% of the face value of the
allocation. Tugawe Rivers is a non-governmental organization
whose supporting papers, after audit, were found by the
Commission on Audit to be fictitious. Other than to prepare and
submit falsified papers to support the encashment of the pork
barrel checks, Tugawe Rivers does not appear to have done
anything on the endorsed projects and Congressman Kafuerte
likewise does not appear to have bothered to monitor the
progress of the project he endorsed. The congressmen
converted most of the commissions he generated into US
dollars, and deposited these in a foreign currency account with
Banco de Plata (BDP). Based on amply-supported tips given by
a congressman from another political party, the Anti-Money
Laundering Council sent BDP an order: (1) to confirm Cong.
Kafuerte’s deposits with the bank and to provide details of
these deposits; and (2) to hold all withdrawals and other
transactions involving the congressman’s bank accounts. As
counsel for BDP, what would you advise the bank?

SUGGESTED ANSWER:
I will advise Banco de Plata not to comply with the order of the
Anti-Money Laundering Council (AMLC). The AMLC cannot inquire into the
deposits of Congressman Kafuerte, regardless of currency, without a bank inquiry
order from a competent court. This is because the crimes involved here are not
kidnapping for ransom, violations of the Comprehensive Dangerous Drugs Act,
hijacking and other violations of Republic Act No. 6235, destructive arson, murder,
and terrorism and conspiracy to commit terrorism (Section 11 of Anti-Money
Laundering Act). The AMLC also cannot order Banco de Plata to hold all
withdrawals and other transactions involving the accounts of Congressman
Kafuerte. The law provides that it is the Court of Appeals, which has the power to
issue a freeze order over the accounts upon petition of the AMLC (Anti-Money
Laundering Act; Republic v. Cabrini Green Ross, 489 SCRA 644,2006).

Mr. X is a stockholder of Sunshine Corporation, a corporation

registered under Philippine laws of which Mr. X owns 10,000
shares out of the corporation’s subscribed shares of 100,000.
Mr. X claims that pertinent information relative to Sunshine’s
operations were withheld from him and his repeated requests
for copies of financial statements and for him to be allowed to
inspect corporate books were denied by the corporation.
Consequently, he filed a complaint against Mr.Y, president of
Sunshine Corporation, for violation of the Corporation Code.
The Assistant City Prosecutor issued a resolution finding
probable cause to indict Mr. Y based on the ground that under
the law, complainant, as a stockholder, is entitled to inspect the
corporate books and records of Sunshine Corp. The case was
filed before the Manila Regional Trial Court, acting as special
commercial court, which dismissed the action during the pre-
trial conference on the ground that Sunshine Corp.’s articles of
incorporation contains an arbitration agreement so that all
intra-corporate disputes shall be referred to arbitration. Is the
court correct in dismissing the action?

SUGGESTED ANSWER:
No. While Sec. 181 of RA 11232 or the Revised Corporation
Code states that an arbitration agreement may be provided in
the articles of incorporation of a corporation and that when
such an agreement is in place, disputes between the
corporation, its stockholders or members, which arise from
intra-corporate relations, shall be referred to arbitration, the
same section provides that a dispute shall be non-arbitrable
when it involves criminal offenses. Under the Revised
Corporation Code, the unjustified failure or refusal by the
corporation, or by those responsible for keeping and
maintaining corporate records, to comply with the provisions
and other pertinent rules on inspection and reproduction of
records shall be punished with a fine ranging from P10,000 to
P200,000 at the court’s discretion. Here, as Sunshine’s violation
is criminal nature then the dispute is non-arbitrable. Hence, the
court was incorrect in dismissing the action on the ground that
the dispute must be submitted to arbitration.
Louis Vuitton, a well-known international mark, manufactures
bags, shoes, watches, jewelry, accessories and apparel. The
logo LV appears in its products. Chy thought of opening a chain
of restaurants with the name Louis Vuitton and use the LV logo
as it is her favorite brand. She comes to you for advice on
whether she should register the name Louis Vuitton with the LV
logo for her restaurants. What will you tell her?
SUGGESTED ANSWER:
I would advise Chy not to use and register Louis Vuitton as the
name of her restaurant. Louis Vuitton is considered as a well-
known trademark. As scuh, any mark identical or confusingly
similar to, or constitutes a translation of Louis Vuitton is
proscribed from being registered as a trademark in the country.
The public may be misled into believing that Chy’s restaurant is
connected with Louis Vuitton or part of its business expansion.
The proscription applies even if Louis Vuitton is not registered
here in the Philippines and its good are totally unrelated to the
restaurant service of Chy. Likewise, Louis Vuitton could oppose
the application for registration of Chy, invoking its interest that
may be damaged if the mark Louis Vuitton will be used as a
name of a restaurant. Under the theory of trademark dilution,
the distinctiveness of Louis Vuitton as high-end brand for bags,
shoes, watches, and other items may whittle away, effectively
diminishing its commercial value to the detriment of its long-
established reputation in the fashion and manufacturing
industry.

Kim, a stockholder of Wonderland Country Club pledged his

fully paid share of stock to China Bank. Upon request of China
Bank, said pledge was noted in the corporate books of
Wonderland. Due to non-payment of the loan, China Bank sold
the pledged share at a public auction where it emerged as the
highest bidder. China Bank then requested Wonderland to
transfer the said share to its name but Wonderland refused in
view of Kim’s unsettled accounts representing monthly
membership dues. After demanding payment from Kim,
Wonderland sold his share at a public auction. China Bank sued
Wonderland to compel the latter to issue a new certificate of
stock in China Bank’s name. Was the refusal of Wonderland to
transfer the share to China Bank proper?

SUGGESTED ANSWER:
No. The law provides that a corporation may refuse to transfer
a share in its books whenever such corporation holds any
unpaid claim on such share. Jurisprudence provides that the
term unpaid claim refers to any unpaid claim arising from
unpaid subscription, and not to any indebtedness which a
subscriber or stockholder may owe the corporation arising from
any other transaction. In the case at bar, the subscription for
the share in question has been fully paid. What Kim owed the
corporation were merely monthly membership dues. Hence
Wonderland’s refusal to transfer the share to China Bank was
not proper (China Banking Corporation v. Court of Appeals, 270
SCRA 503).

Three newbie lawyers formed a general professional

partnership. A contributed land, B contributed money and C
contributed industry. As they all wanted a posh office, they
mortgaged the land contributed by A to Savings Bank and used
the proceeds of the loan to buy an office space in one of the
high rises in Makati. They, however, failed to pay the loan.
Hence, Savings Bank proceeded to extrajudicially foreclose the
land. At the public auction, the land was sold to Donato Perez.
The certificate of sale was registered with the Register of
Deeds. May the general professional partnership or anyone of
its partners redeem the land?
SUGGESTED ANSWER:
No, under the General Banking Law, in case of extrajudicial
foreclosure by a bank, the mortgagor, which is a juridical
person has until 3 months after the foreclosure or until the
registration of the foreclosure sale, whichever is earlier, within
which to redeem the property (Sec. 47, GBL). Here, the
mortgagor is a general professional partnership, which is a
juridical person. Consequently, when the certificate of sale was
registered, the redemption period had already expired.

Eco Charters was engaged in maritime shipping and owned a

vessel that carried various cargo through the Pacific Ocean. In
one of its voyages, a massive storm suddenly threatened its
safety. In order to save the vessel and cargo, after following all
the necessary legal steps, the Captain jettisoned and threw out
all the wooden furniture and electronic appliances owned by the
ship. However, despite all efforts, the ship still sunked along
with all the cargo. Eco Charters now seeks payment from all the
cargo owners for the cost of the furniture and appliances
thrown out in trying to save the vessel in the form of general
average. Can Eco Charters collect from the cargo owners?

SUGGESTED ANSWER:
No. Under maritime law, one of the requisites for general
average is that damages or expenses were incurred following
the successful saving of the vessel and cargo. In the case at
bar, the vessel still actually sunk despite all efforts and
sacrifice of property. Even if all the other requisites for general
average of common danger, sacrifice for the common safety,
and taking of legal steps were all present, the fact that the
vessel was not successfully saved negates the claim for general
average. Hence, Eco Charters cannot collect from the cargo
owners as there was no general average (A. Magsaysay, Inc. v.
Agan, G.R. No. L-6393, January 31, 1955).