Mercantile Law Bar Questions 06-14

8/17/2019 Mercantile Law Bar Questions 06-14

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1 | P a g e - M e r c a n t i l e L a w B a r Q u e s t i o n s

Mercantile Law Bar Questions2006

- I -

1. What is the doctrine of "piercing the eil of corporate entit!" #$plain 2.%&

2. 'o what circu(stances will the doctrine appl! 2.%&

). What is the (ini(u( and (a$i(u( nu(*er of incorporators re+uired to

incorporate a stoc, corporation is this also the sa(e (ini(u( and (a$i(u(

nu(*er of dicrectors re+uired in a stoc, corporation 2.%&

. Must all incorporators and directors *e residents of the hilippines 2.%&

- II -

/iscuss the legal conse+uences when a *an, honors a forged chec,. %&

- III -

un was a*out to leae for a *usiness trip. s his usual practice he signed seeral *lan,

chec,s. 3e instructed 4uth his secretar! to fill the( as pa!(ent for his o*ligations. 4uth

filled one chec, with her na(e as pa!ee placed )0000.00 thereon endorsed and

deliered it to Marie. 5he accepted the chec, in good faith as pa!(ent for goods she

deliered to 4uth. #entuall! 4uth regretted what she did and apologied to un.

I((ediatel! he directed the drawee *an, to dishonor the chec,. When Marie encashed the

chec,. it was dishonored.

1. Is un lia*le to Marie %&

2. 5upposing the chec, was stolen while in 4uth7s possession and a thief filled the

*lan, chec, endorsed and deli*ered it to Marie in pa!(ent for the goods he

purchased fro( her is un lia*le to Marie if the chec, is dishonored %&

- I8 -

4ud! is 9o*less *ut is reputed to *e a 9ueteng operator. 3e has neer *een charged

conicted of an! cri(e. 3e (aintains seeral *an, accounts and has purchased % hou

and lots for his children fro( the Luansing 4ealt! I Inc. 5ince he does not hae a

isi*le 9o* the co(pan! reported his purchases to the nti-Mone! Laundering :oun

;ML:


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- 8I -

1. In seeral polic! addresses e$tensiel! coered *! (edia since his appoint(ent

on /ece(*er 21 200% :hief ustice rte(io 8. angani*an owed to leae a

9udiciar! characteried *! "four Ins" and to focus in soling the "four :I/"

pro*le(s that corrode the ad(inistration of 9ustice in our countr!.

#$plain this "four Ins" and "four :I/" pro*le(s. 2.%&

2. 'he :hief ustice also said that the 9udiciar! (ust "safeguard the li*ert!" and

"nurture the prosperit!" of our people.

#$plain this philosoph!. :ite /ecisions of the 5upre(e :ourt i(ple(enting each

of these twin *eacons of the :hief ustice. 2.%&

- 8II -

1. What is a (utual insurance co(pan! or association 2.%&

2. /istinguish *etween the role of a conserator and that of a receier of a *an,.

2.%&

- 8III -

io is the president of Western Ban,. 3is wife applied for a loan with the said *an, to

finance an internet cafe. 'he loan officer told her that her application will not *e approed

*ecause the grant of loans to related interests of *an, directors officers and stoc,holders

is prohi*ited *! the @eneral Ban,ing Law.

#$plain whether the loan officer is correct. %&

- IA -

'he Blue 5tar :orporation filed with the 4egional 'rial :ourt a petition for reha*ilitation

on the ground that it foresaw the i(possi*ilit! of pa!ing its o*ligations as the! fall due.

?inding the petition sufficient in for( and su*stance the court issued an rder appoint

a reha*ilitation receier and sta!ing the enforce(ent of all clai(s against the corporatio

What is the rationale for the 5ta! rder %&

- A -

1. What acts or o(issions are penalied under the 'rust 4eceipts Law 2.%&

2. Is lac, of intent to defraud a *ar to the prosecution of these acts or o(issio

2.%&

- AI -

=nder 4epu*lic ct Co.10% ;'he Ban, 5ecrec! Law


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In a written legal opinion for a client on the difference *etween apprenticeship and

learnership Lia +uoted without per(ission a la*or law e$pert7s co((ent appearing in his

*oo, entitled "nnotations on the La*or :ode."

:an the la*or law e$pert hold Lia lia*le for infringe(ent of cop!right for +uoting a

portion of his *oo, without his per(ission %&

- A8 -

real estate (ortgage (a! *e foreclosed 9udiciall! or e$tra9udiciall!.

In what instance (a!a (ortgagee e$tra9udiciall! foreclose a real estate (ortgage %&

- A8I -

ursuant to a writ of e$ecution issued *! the 4egional 'rial :ourt in "#$press Ban, .

/on 4u*io" the sheriff leied and sold at pu*lic auction E photocop!ing (achines of /on

4u*io. Is the sheriff7s sale coered *! the Bul, 5ales Law %&

NOTHING FOLLOWS.

200FI.

(10%)

4 issued a chec, for 1M which he used to pa! 5 for ,illing his political ene(!.a. :an the chec, *e considered a negotia*le instru(ent *. /oes 5. hae a cause of action against 4 in case of dishonor *! the drawee *an,c. If 5 negotiated the chec, to ' who accepted it in good faith and for alue (a! 4

*e held secondaril! lia*le *! '

4eason *riefl! in ;a


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In a stoc,holder7s (eeting 5 dissented fro( the corporate act conerting preferred otingshares to non-oting shares. 'hereafter 5 su*(itted his certificates of stoc, for notationthat his shares are dissenting. 'he ne$t da! 5 transferred his shares to ' to who( newcertificates were issued. Cow ' de(ands fro( the corporation the pa!(ent of the alueof his shares.

a. What is the (eaning of a stoc,holder7s appraisal right *. :an ' e$ercise the right of appraisal 4eason *riefl!.

VIII.(10%)

/ue to growing financial difficulties G Ban, was una*le to finish construction of its 21-store! *uilding on a pri(e lot located in Ma,ati :it!. Ineita*l! the BangkoSentral ordered the closure of G Ban, and conse+uentl! placed it under receiership. In a *id to sae the *an,7s propert! inest(ent the resident of G Ban, entered into afinancing agree(ent with a group of inestors for the co(pletion of the construction of the 21-store! *uilding in e$change for a ten !ear lease and the e$clusie option to purchase the *uilding.

a. Is the act of the resident alid Wh! or wh! not *. Will a suit to enforce the e$clusie right of the inestors to purchase the propert!

prosper 4eason *riefl!.IX.

(5%)n /ece(*er 200) 4#/ :orporation e$ecuted a real estate (ortgage in faor of BL=# Ban,. 4#/ :orporation defaulted in the pa!(ent of its loan. :onse+uentl! onune 200 BL=# Ban, e$tra9udiciall! foreclosed the propert!. Being the highest *idder in the auction sale conducted the Ban, was issued a :ertificate of 5ale which wasregistered on ugust 200./oes 4#/ :orporation still hae the right to redee( the propert! as of 5epte(*er 1200F 4eason *riefl!.X.

(5%)

Ca(e at least fie ;%< predicate cri(es to (one! laundering.XI.

(10%)

'wo essels figured in a collision along the 5traits of @ui(aras resulting in considera*leloss of cargo. 'he da(aged essels were safel! conducted to the ort of Iloilo. assenger failed to file a (ariti(e protest. B. a non-passenger *ut a shipper who suffered da(ageto his cargo li,ewise did not file a (ariti(e protest at all.

a. What is a (ariti(e protest

*. :an and B successfull! (aintain an action to recoer losses and da(aarising fro( the collision 4eason *riefl!.

XII.

(5%)

5ee,ing to strea(line its operations and to *ail out its losing entures the stoc,holderA :orporation unani(ousl! adopted a proposal to sell su*stantiall! all of the (achineand e+uip(ent used in and out its (anufacturing *usiness and to sin, the proceeds of

sale for the e$pansion of its cargo transport serices.a. Would the transaction *e coered *! the proisions of the Bul, 5ales Law *. 3ow would A :orporation effect a alid sale

XIII.

(10%)

a. What are the preferred clai(s that shall *e satisfied first fro( the assets ofinsolent corporation

*. 3ow shall the re(aining non-preferred creditors share in the estate of insolent corporation a*oe

NOTHING FOLLOWS.

200EI

A corporation entered into a contract with ' :ontruction :orp. for the latter to constrand *uild a sugar (ill within si$ ;6< (onths. 'he! agreed that in case of dela! :onstruction :orp. will pa! A :orporation 100000 for eer! da! of dela!. 'o ens pa!(ent of the agreed a(ount of da(ages ' :onstruction :orp. secured fro( tlaBan, a confir(ed and irreoca*le letter of credit which was accepted *! A :orporatiodue ti(e. ne wee, *efore the e$piration of the si$ ;6< (onth period ' :onstruct:orp. re+uested for an e$tension of ti(e to delier clai(ing that the dela! was due to fault of A :orporation. controers! as to the cause of the dela! which inoled wor,(anship of the *uilding ensued. 'he controers! re(ained unresoled. /espite controers! A :orporation presented a clai( against tlantic Ban, *! e$ecuting a dagainst the letter of credit.

a. :an tlantic Ban, refuse pa!(ent due to the unresoled controers! #$pl;)&<

*. :an A :orporation clai( directl! fro( ' :onstruction :orp. #$plain. ;)&<II

'o( :ru o*tained a loan of 1 Million fro( AHG Ban, to finance his purchase of %0 *ags of fertilier. 3e e$ecuted a trust receipt in faor of AHG Ban, oer the %000 *agfertilier. 'o( :ru withdrew the %000 *ags fro( the warehouse to *e transportedLucena :it! where his store was located. n the wa! ar(ed ro**ers too, fro( 'o( :


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the %000 *ags of fertilier. 'o( :ru now clai(s that his o*ligation to pa! the loan toAHG Ban, is e$tinguished *ecause the loss was not due to his fault. Is 'o( :ru correct#$plain. ;&<III

a. s a rule under the Cegotia*le Instru(ents Law a su*se+uent part! (a! hold a prior part! lia*le *ut not ice-ersa. @ie two ;2< instances where a prior part!(a! hold a su*se+uent part! lia*le. ;2&<

*. 3ow does the "shelter principle" e(*odied in the Cegotia*le Instru(ents Lawoperate to gie the rights of a holder-in-due course to a holder who does not haethe status of a holder-in-due course Briefl! e$plain. ;2&<

IV

B :orporation drew a chec, for pa!(ent to AH Ban,. 'he chec, was gien to an officer of B :orporation who was instructed to delier it to AH Ban,. Instead the officerintending to defraud the :orporation filled up the chec, *! (a,ing hi(self as the pa!eeand deliered it to AH Ban, for deposit to his personal account. B :orporation co(e to,now of the officer7s fraudulent act after he a*sconded. B :orporation as,ed AH Ban, torecredits its a(ount. AH Ban, refused.

a. If !ou were the 9udge what issues would !ou consider releant to resole thecase #$plain ;)&<

*. 3ow would !ou decide the case #$plain. ;2&<

Vancho drew a chec, to Bong and @erard 9ointl!. Bong indorsed the chec, and also forged@erard7s endorse(ent. 'he pa!or *an, paid the chec, and charged ancho7s account for the a(ount of the chec,. @erard receied nothing fro( the pa!(ent.

a. ancho as,ed the pa!or *an, to recredit his account. 5hould the *an, co(pl!#$plain full!. ;)&<

*. Based on the facts was ancho as drawerdischarged on the instru(ent Wh!;2&<

VI

n anuar! 1 2000 ntonio 4iera secured a life insurance fro( 55 Insurance :orp.for 1 Million with @e((a 4iera his adopted daughter as the *eneficiar!. ntonio4iera died on March 200% and in the police inestigation it was ascertained that@e((a 4iera participated as an accessor! in the ,illing of ntonio 4iera. :an 55

Insurance :orp. aoid lia*ilit! *! setting up as a defense the participation of @e((a4iera in the ,illing of ntonio 4iera /iscuss with reasons. ;&<VII

'erraas de atio 8erde a condo(iniu( *uilding has a alue of %0 Million. 'he owner insured the *uilding against fire with three ;)< insurance co(panies for the followinga(ounts>

Corthern Insurance :orp. - 20 Million

5outhern Insurance :orp. - )0 Million

#astern Insurance :orp. - %0 Million

a. Is the owner7s ta,ing of insurance for the *uilding with three ;)< insurers a/iscuss. ;)&<

*. 'he *uilding was totall! raed *! fire. If the owner decides to clai( fro( #astInsurance :orp. onl! %0 Million will the clai( prosper #$plain. ;2&<

VIII

:it! 4ailwa!s Inc. ;:4I< proides train serices for a fee to co((uters fro( Manil:ala(*a Laguna. :o((uters are re+uired to purchase tic,ets and then proceeddesignated loading ang unloading facilities to *oard the train. 4icardo 5antos purchasetic,et for :ala(*a and entered the station. While waiting he had an altercation with securit! guard of :4I leading to a fistfight. 4icardo 5antos fell on the railwa! 9ust atrain was entering the station. 4icardo 5antos was run oer *! the train. 3e died.In the action for da(ages filed *! the heirs of 4icardo 5antos :4I interposed lac,cause of action contending that the (ishap occurred *efore 4icardo 5antos *oarded train and that it was not guilt! of negligence. /ecide.;%&<IX

n cto*er )0 200F M8 acific a hilippine registered essel owned *! :5hipping :o(pan! ;:5:


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atop the sidewal,s ad9oining the construction site the co(pan! proceeded with theconstruction wor,. ne da! a hea! piece of lu(*er fell fro( the *uilding. It s(ashed ata$ica* which at that ti(e had gone offroad and onto the sidewal, in order to aoid thetraffic. 'he ta$ica* passenger died as a result.

a. ssu(e that the co(pan! had no (ore account and propert! in its na(e. scounsel for the heirs of the icti( who( will !ou sue for da(ages and whattheor! will !ou adopt ;)&<

*. If !ou were the counsel for 5onnel :onstruction how would !ou defend !our client What would *e !our theor! ;2&<

c. :ould the heirs hold the ta$ica* owner and drier lia*le #$plain. ;2&<XI

a. 5ince ?e*ruar! E 1K)% the legislature has not passed een a single law creating a priate corporation. What proision of the :onstitution precludes the passage of such a law ;)&<

*. Ma! the co(position of the *oard of directors of the Cational ower :orporation;C:< *e alidl! reduced to three ;). #loise wants to preent pu*lication of her colu(ns in that antholog! since she was neer paid *! newspaper. Ca(e one irrefuta*le legal argu(ents #loise could cite to en9oin CMedia #nterprises fro( including her colu(ns in its antholog!. ;2&<

XVI

In 1KKK Mocha War( an (erican (usician had a hit rap single called War( Wa3one! which he hi(self co(posed and perfor(ed. 'he single was produced *:alifornia record co(pan! @alactic 4ecords. Man! noticed that so(e passages frWar( War( 3one! sounded eeril! si(ilar to parts =nde 3assle a 1KFE hit song *! British roc, *and Ma9est!. cop!right infringe(ent suit was filed in the =nited 5taagainst Mocha War( *! Ma9est!. It was later settled out of court with Ma9est! receiattri*ution as co-author of War( War( 3one! as well as a share in the ro!alties.

B! 2002 Mocha War( was nearing *an,ruptc! and he sold his econo(ic rights oWar( War( 3one! to @alactic 4ecords for 10000In 200E lanet ?il(s a ?ilipino (oie producing co(pan! co((issioned / :hef ea ?ilipino (usician to produce an original re-(i$ of War( War( 3one! for use in oneits latest fil(s stig. / :hef ean re(i$ed War( War( 3one! with salsa *eat ainterspersed as well a recital of a poetic stana *! ohn Bla,e a 1Fth centur! 5cott


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poet. / :hef ean died shortl! after su*(itting the re(i$ed War( War( 3one! to lanet?il(s.rior to the release of stig Mocha War( learns of the re(i$ed War( War( 3one! andde(ands that he *e pu*licit! identified as the author of the re(i$ed song in all the :/coers and pu*licit! releases of lanet ?il(s.

a. Who are the parties or entities entitled to *e credited as author of the re(i$edWar( War( 3one! 4eason out !our answer. ;)&<

*. Who are the particular parties or entities who e$ercise cop!right oer the re(i$edWar( War( 3one! #$plain. ;)&<

XVII

n anuar! 1 200E l o*tained a loan of 10000 fro( Bo* to *e paid on anuar!)0200E secured *! a chattel (ortgage on a 'o!ota (otor car. n ?e*ruar! 1 200E lo*tained another loan of 10000 fro( Bo* to *e paid on ?e*ruar! 1% 200E. he securedthis *! e$ecuting a chattel (ortgage on a 3onda (otorc!cle. n the due date of the firstloan l failed to pa!. Bo* foreclosed the chattel (ortgage *ut the car was *idded for 6000 onl!. l also failed to pa! the second loan due on ?e*ruar! 1% 200E. Bo* filed anaction for collection of su( (one!. l filed a (otion to dis(iss clai(ing that Bo* shouldfirst cforeclosed the (ortgage on the 3onda (otorc!cle *efore he can file the action for su( of (one!. /ecide with reasons. ;&<XVIII

a. :an a distressed corporation file a petition for corporate reha*ilitation after thedis(issal of its earlier petition for insolenc! Wh! ;2&<

*. :an the corporation file a petition for reha*ilitation first and after it is dis(issedfile a petition for insolenc! Wh! ;2&<

c. #$plain the ,e! phrase "e+ualit! is e+uit!" in corporate reha*ilitation proceedings. ;2&<

XIX

Industr! Ban, which has a net worth of 1 Billion e$tended a loan to :elestial ropertiesInc. a(ounting to 2F0 Million. 'he loan was secured *! a (ortgage oer a astco((ercial lot in the ?ort Bonifacio @lo*al :it! appraised at )%0 Million. fter auditthe Bang,o 5entral ng ilipinas gae notice that the loan to :elestial roperties e$ceededthe single *orrower7s li(it of 2%& of the *an,7s net worth under a recent B5 :ircular. Inlight of other preious si(ilar iolations of the credit li(it re+uire(ent the B5 adised

Industr! Ban, to reduce the a(ount of the loan to :elestial roperties under pain of seere sanctions. When Industr! Ban, infor(ed :elestial roperties that it intended toreduce the loan *! %0 Million :elestial roperties countered that the *an, should firstrelease a part of the collateral worth %0 Million. Industr! Ban, re9ected the counter- proposal and reffered the (atter to !ou as counsel. 3ow would !ou adise Industr! Ban, to proceed with its *est interest in (ind ;%&<

NOTHING FOLLOWS.

200KPART I

I

TRUE or FALSE. nswer '4=# if the state(ent is true or ?L5# if the state(enfalse. #$plain !our answer in not (ore than two ;2< sentences. ;%&<

a. 'he Denicola Test in intellectual propert! law states that if design ele(ents oarticle reflect a (erger of aesthetic and functional considerations the artiaspects of the wor, cannot *e conceptuall! separa*le fro( the utilitarian aspethus the article cannot *e cop!righted.

*. If the (*uds(an is coninced that there is a iolation of law after inestigata co(plaint alleging illicit *an, deposits of a pu*lic officer the (*uds(an (order the *an, concerned to allow in camerainspection of *an, records docu(ents.

c. #en if the seller and the *u!er in a sale in *ul, iolate the Bul, 5ales Lawsale would still *e alid.

d. /iidends on shares of stoc,s can onl! *e declared out of unrestricted retaiearnings of the corporation.

e. *an, under receiership can still grant new loans and accept new deposits.

IItlantis 4ealt! :orporation ;4:


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ffice of the 4egister of /eeds of Ma,ati :it! where Aer$es :orporation has its principaloffice. 'he (ortgage on the car was registered in the ffice of the 4egister of /eeds of Manila. r(ando e$ecuted a single ffidait of @ood ?aith coering *oth (ortgages.r(ando defaulted on the pa!(ent of his o*ligationN thus Bernardo foreclosed on the twochattel (ortgages. r(ando filed suit to nullif! the foreclosure and the (ortgages raisingthe following issues>

a. 'he e$ecution of onl! one ffidait of @ood ?aith for *oth (ortgages inalidated

the two (ortgagesN ;2&< and *. 'he (ortgage on the shares of stoc,s should hae *een registered in the ffice of

the 4egister of /eeds of Manila where he resides as well as in the stoc, andtransfer *oo, of Aer$es :orporation. ;)&<4ule on the foregoing issues with reasons.

c. ssu(e that Bernardo e$tra9udiciall! foreclosed on the (ortgages and *oth thecar and the shares of stoc, were sold at pu*lic auction. If the proceeds fro( such pu*lic sale should *e 1-(illion short of r(andoOs total o*ligation canBernardo recoer the deficienc! Wh! or wh! not ;2&<

IV

ntarctica Life ssurance :orporation ;L:< pu*licl! offered a speciall! designedinsurance polic! coering persons *etween the ages of %0 to F% who (a! *e afflicted withserious and de*ilitating illnesses. Quirico applied for insurance coerage stating that he

was alread! E0 !ears old. Conetheless L: approed his application.Quirico then re+uested L: for the issuance of a coer note while he was tr!ing to raisefunds to pa! the insurance pre(iu(. L: granted the re+uest. 'en da!s after hereceied the coer note Quirico had a heart seiure and had to *e hospitalied. 3e thenfiled a clai( on the polic!.

a. :an L: alidl! den! the clai( on the ground that the insurance coerage as pu*licl! offered was aaila*le onl! to persons %0 to F% !ears of age Wh! or wh!not ;2&<

*. /id L:Os issuance of a coer note result in the perfection of an insurancecontract *etween Quirico and L: #$plain. ;)&<

V

:ecilio is planning to put up a grocer! store in the su*diision where he and his fa(il!reside. 'o pro(ote this proposed *usiness enture he told his wife and three children to

send out pro(otional te$t (essages to all the residents in the su*diision. :ecilioOs fa(il!(e(*ers did as instructed and succeeded in reaching through te$t (essages (ore thanE0& of the residents in the su*diision.Is :ecilio ha*ituall! engaged in co((erce een if the grocer! store has !et to *eesta*lished #$plain !our answer. ;)&<VI

Loreno drew a *ill of e$change in the a(ount of 100000.00 pa!a*le to Bar*araorder with his wife /iana as drawee. t the ti(e the *ill was drawn /iana was unawthat Bar*ara is LorenoOs para(our.Bar*ara then negotiated the *ill to her sister #lena who paid for it for alue and who not ,now who Loreno was. n due date #lena presented the *ill to /iana for pa!( *ut the latter pro(ptl! dishonored the instru(ent *ecause *! then /iana had alrelearned of her hus*andOs dalliance.

a. Was the *ill lawfull! dishonored *! /iana #$plain. ;)&< *. /oes the illicit cause or consideration adersel! affect the negotia*ilit! of the *

#$plain. ;)&<VII

@lo*al 'ransport 5erices Inc. ;@'5I< operates a fleet of cargo essels pl!ing interislroutes. ne of its essels M8 /ona uana left the port of Manila for :e*u laden wa(ong other goods 10000 teleision sets consigned to 4o(ualdo a '8 retailer in :e*When the essel was a*out ten nautical (iles awa! fro( Manila the ship captain heardthe radio that a t!phoon which as announced *! @-5 was on its wa! out of countr! had suddenl! eered *ac, into hilippine territor!. 'he captain realied that M/ona uana would traerse the stor(Os path *ut decided to proceed with the o!age. 'enough the essel sailed into the stor(. 'he captain ordered the 9ettison of the 100teleision sets along with so(e other cargo in order to lighten the essel and (a,

easier to steer the essel out of the path of the t!phoon. #entuall! the essel withcrew intact arried safel! in :e*u.

a. Will !ou characterie the 9ettison of 4o(ualdoOs '8 sets as an aerage Ifwhat ,ind of an aerage and wh! If not wh! not ;)&<

*. gainst who( does 4o(ualdo hae a cause of action for inde(nit! of his lostsets #$plain. ;)&<

VIII

Maharli,ang ilipino Ban,ing :orporation ;MB:< operates seeral *ranchesMaharli,ang ilipino 4ural Ban, in #astern 8isa!as. l(ost all the *ranch (anagersclose relaties of the (e(*ers of the Board of /irectors of the corporation. Mundesering relaties of the *ranch (anagers were granted loans. In ti(e the *ranchcould not settle their o*ligations to depositors and creditors.4eceiing reports of these irregularities the 5uperising and #$a(ining /epart(

;5#/< of the Monetar! Board prepared a detailed report ;5#/ 4eport< specif!ing the faand the chronolog! of eents relatie to the pro*le(s that *eset MB: rural * *ranches. 'he report concluded that the *an, *ranches were una*le to pa! their lia*ilias the! fell due and could not possi*l! continue in *usiness without incurring su*stanlosses to its depositors and creditors.


9/51


a. Ma! the Monetar! Board order the closure of the MB: rural *an,s rel!ing onl!on the 5#/ 4eport without need of an e$a(ination #$plain. ;)&<

*. If MB: hires !ou as law!er *ecause the Monetar! Board has for*idden it fro(carr!ing on its *usiness due to its i((inent insolenc! what action will !ouinstitute to +uestion the Monetar! BoardOs order #$plain. ;)&<

IX

When is there an ultra vires act on the part of Pa the corporationN P* the *oard of

directorsN and Pc the corporate officers. ;)&<X

What are the so-called exempt securities under the 5ecurities 4egulation :ode ;2&<

PART II

XI

TRUE or FALSE. nswer '4=# if the state(ent is true or ?L5# if the state(ent isfalse. #$plain !our answer in not (ore than two ;2< sentences. ;%&<

a. loan agree(ent which proides that the de*tor shall pa! interest at the ratedeter(ined *! the *an,Os *ranch (anager iolates the disclosure re+uire(ent of the 'ruth in Lending ct.

*. =nder the Warehouse 4eceipts Law a warehouse(an loses his lien upon the

goods when he surrenders possession thereof.c. 'he Hoe! Test states that there is an inest(ent contract when a person inests

(one! in a co((on enterprise and is led to e$pect profits pri(aril! fro( theefforts of others.

d. docu(ent dated ul! 1% 200K that reads> "#a! to $ or or%er t&e sum o' #()***.** 'ive %a!s a'ter &is pet %og) Spark!) %ies. Signe% +." is a negotia*leinstru(ent.

e. " *an, is *ound to ,now its depositorOs signature" is an infle$i*le rule indeter(ining the lia*ilit! of a *an, in forger! cases.

XII

@audencio a store owner o*tained a 1-(illion loan fro( Bathala ?inancing :orporation;B?:

"I') 'or an! reason) t&e receiva,les or an! part t&ereo' cannot ,e pai% ,! t&eo,ligors) t&e -SSIGNO uncon%itionall! an% irrevoca,l! agrees to pa! t&e same)assuming t&e lia,ilit! to pa!) ,! a! o' penalt!) t&ree percent /012 o' t&e total amount unpai%) 'or t&e perio% o' %ela! until t&e same is 'ull! pai%."

When the chec,s *eca(e due B?: deposited the( for collection *ut the drawee *adishonored all the chec,s for one of the following reasons> "account closed" "pa!(stopped" "account under garnish(ent" or "insufficienc! of funds." B?: w@audencio notif!ing hi( of the dishonored chec,s and de(anding pa!(ent of the loBecause @audencio did not pa! B?: filed a collection suit.In his defense @audencio contended that Pa B?: did not gie ti(el! notice of disho;of the chec,s


10/51


Lacoste International the ?rench fir( that (anufactures Lacoste apparel and owns theLacoste trade(ar, decided to cash in on the uniersal popularit! of the *o$ing icon. Itreprinted the photographs with the per(ission of the newspaper pu*lishers and went on aworld-wide *lit of print co((ercials in which 5onn! is shown wearing a Lacoste shirtalongside the phrase "Sonn! Bac&ao 7ust loves Lacoste." When 5onn! sees the Lacoste adertise(ents he hires !ou as law!er and as,s !ou to sueLacoste International *efore a hilippine court>

a. ?or trade(ar, infringe(ent in the hilippines *ecause Lacoste International usedhis i(age without his per(issionN ;2&<

*. ?or cop!right infringe(ent *ecause of the unauthoried use of the pu*lished photographsN ;2&< and

c. ?or in9unction in order to stop Lacoste International fro( featuring hi( in their co((ercials. ;2&<Will these actions prosper #$plain.

d. :an Lacoste International alidl! ino,e the defense that it is not a hilippineco(pan! and therefore hilippine courts hae no 9urisdiction #$plain. ;2&<

XVI

n 5epte(*er 1% 200F AHG :orporation issued to aterno E00 preferred shares with thefollowing ter(s>

"T&e #re'erre% S&ares s&all &ave t&e 'olloing rig&ts) pre'erences) 8uali'ications)

an% limitations) to it93. T&e rig&t to receive a 8uarterl! %ivi%en% o' One #er :entum /312)

cumulative an% participating;2. T&ese s&ares ma! ,e re%eeme%) ,! %raing o' lots) at an! time a'ter to

/


11/51


Briefl! descri*e the following t!pes of *an,s> ;2& each<

uniersal *an,

co((ercial *an,

thrift *an,

rural *an,

cooperatie *an,

II

3ow do !ou characterie the legal relationship *etween a co((ercial *an, and its safet!deposit *o$ client ;2&<

Is a stipulation in the contract for the use of a safet! deposit *o$ relieing the *an, of lia*ilit! in connection with the use thereof alid ;2&<

/ifferentiate "*an, deposits" fro( "deposit su*stitutes." ;2&<

Wh! are *an,s re+uired to (aintain reseres against their deposits and depositsu*stitutes 5tate one of three purposes for these reseres. ;2&<

III

a(is aper :orporation secured loans fro( B: =niersal Ban, in the aggregate principal a(ount of 100 (illion eidenced *! seeral pro(issor! notes and secured *!a continuing guarant! of its principal stoc,holder Menandro at % (illionN and a realestate (ortgage oer certain parcels of land owned *! Mar+ue.

'he corporation defaulted and the *an, e$tra-9udiciall! foreclosed on the real estate

(ortgage. 'he *an, which was the sole *idder for F% (illion won the award.

:an the *an, sue Mar+ue for the deficienc! of 2% (illion #$plain. ;2&<

If the *an, opts to file an action for collection against the corporation can it afterwardsinstitute a real action to foreclose the (ortgage #$plain. ;2&<

:an the *an, foreclose on the pledged shares of Mar+ue and recoer the deficienc! frthe corporation #$plain. ;2&<

I8

ndante 4ealt! a (ar,eting co(pan! that pro(otes and facilitates sales of real prope

through leerage (ar,eting solicits inestors who are re+uired to *e a Business :enwner ;B:< *! pa!ing an enroll(ent fee of 2%0. 'he B: is then entitled to rectwo other inestors who pa! 2%0 each. 'he B: receies K0 fro( the 2%0 paideach of his recruits and is credited a certain a(ount for pa!(ents (ade *! inestthrough the initial efforts of his Business :enter. nce the accu(ulated a(ount reac%000 the sa(e is used as down pa!(ent for the real propert! chosen *! the B:.

/oes this (ulti-leel (ar,eting sche(e constitute an "inest(ent contract" under 5ecurities 4egulation :ode /efine an "inest(ent contract." ;2&<

What procedure (ust *e followed under the 5ecurities 4egulation :ode to authorie sale or offer for sale or distri*ution of an inest(ent contract ;2&<

What are the legal conse+uences of failure to follow this procedure ;2&<

8

8eneia is a fa(ous international fashion chain with outlets in Ma,ati rtigas Manila. It has co(plied with the (ini(u( capitaliation re+uired under the 4etail 'r Cationaliation ct and carries on retail *usiness worth (ore than ) (illion for eachits outlets. s its Manila outlet is not doing er! well it decides to sell all of its *usinthere consisting of re(aining inentor! furniture and fi$tures and other assets toco(petitor.

8eneiaOs Manila outlet constitutes one-third ;1)< of its total *usiness. 5hould it co(with the re+uire(ents of the Bul, 5ales Law Wh! or wh! not ;2&<

If instead of selling its Manila outlet 8eneia (erel! (ortgages its assets there woulneed to co(pl! with the re+uire(ents of the Bul, 5ales Law ;2&<

What are the legal conse+uences of a failure to co(pl! with the re+uire(ents of the B5ales Law ;2&<


12/51


8I

What contractual stipulations are re+uired in all technolog! transfer agree(ents ;2&<

#nu(erate three ;)< stipulations that are prohi*ited in technolog! transfer agree(ents.;)&<

:an an article of co((erce sere as a trade(ar, and at the sa(e ti(e en9o! patent andcop!right protection #$plain and gie an e$a(ple. ;2&<

8II

=nion Mines Inc. has total assets of 60 (illion with 210 stoc,holders holding at least100 shares each.

'he co(pan! has two principal stoc,holders B: which owns 60& of the shares of stoc, and AHG which owns 1F&.

B: in turn is owned to the e$tent of 21.)1& *! c(e Inc.N 2K.6K& *! @olden Bo!

Inc.N K& *! AHGN and the rest *! indiidual stoc,holders.

Cone of the parties is a pu*licl!-listed co(pan!.

AHG now proposes to *u! c(eOs and @olden Bo!Os shares in B: which would gie itdirect control of B: and indirect control of =nion Mines.

Is the proposed ac+uisition *! AHG su*9ect to the (andator! tender offer rule Wh! or wh! not What is a tender offer and when is it (andator! ;%&<

8III

Marlon deposited with LH4I: Ban, a (one! (ar,et place(ent of 1 (illion for a ter(

of )1 da!s. n (aturit! date one clai(ing to *e Marlon called up the LH4I: Ban, account officer and instructed hi( to gie the (anagerOs chec, representing the proceedsof the (one! (ar,et place(ent to MarlonOs girlfriend Ingrid.

'he chec, which *ore the forged signature of Marlon was deposited in IngridOs accowith HM3 Ban,. HM3 Ban, sta(ped a guarant! on the chec, reading> " prior endorse(ents andor lac, of endorse(ent guaranteed."

=pon present(ent of the chec, LH4I: Ban, funds the chec,. /a!s later Marlon goeLH4I: Ban, to collect his (one! (ar,et place(ent and discoers the foregotransactions.

Marlon thereupon sues LH4I: Ban, which in turn files a third-part! co(plaint agaiHM3 Ban,. /iscuss the respectie rights and lia*ilities of the two *an,s. ;%&<

IA

Hour client /ianne approaches !ou for legal adice on putting up a (ediu(-sirestaurant *usiness that will specialie in a noel t!pe of cuisine. s /ianne feels that *usiness is a little ris,! she wonders whether she should use a corporation as the *usinehicle or 9ust run it as a single proprietorship. 5he alread! has an e$isting corporatthat is producing (eat products profita*l! and is also considering the alternatie of si(setting up the restaurant as a *ranch office of the e$isting corporation.

Briefl! e$plain to !our client what !ou see as the legal adantages and disadantageusing a separate corporation a single proprietorship or a *ranch of an e$isting corporatfor the proposed restaurant *usiness. ;)&<

If !ou adise !our client to use a corporation what officer positions (ust the corporatat least hae ;2&<

What particular +ualifications if an! are these officers legall! re+uired to possess unthe :orporation :ode ;2&<

A

'o secure a loan of 10 (illion Mario (ortgaged his *uilding to r(ando. In accorda

with the loan arrange(ents Mario had the *uilding insured with ?irst Insurance :o(pfor 10 (illion designating r(ando as the *eneficiar!.

r(ando also too, an insurance on the *uilding upon his own interest with 5ecInsurance :o(pan! for % (illion.


13/51


'he *uilding was totall! destro!ed *! fire a peril insured against under *oth insurance policies. It was su*se+uentl! deter(ined that the fire had *een intentionall! started *!Mario and that in iolation of the loan agree(ent he had *een storing infla((a*le(aterials in the *uilding.

3ow (uch if an! can r(ando recoer fro( either or *oth insurance co(panies ;2&<

What happens to the 10 (illion de*t of Mario to r(ando #$plain. ;)&<

AI

#nri+ue o*tained fro( 5eguro Insurance :o(pan! a co(prehensie (otor ehicleinsurance to coer his top of the line ston Martin. 'he polic! was issued on March )12010 and on een date #nri+ue paid the pre(iu( with a personal chec, postdated pril6 2010.

n pril % 2010 the car was inoled in an accident that resulted in its total loss.

n pril 10 2010 the drawee *an, returned #nri+ueOs chec, with the notation"Insufficient ?unds." =pon notification #nri+ue i((ediatel! deposited additional funds

with the *an, and as,ed the insurer to redeposit the chec,.

#nri+ue thereupon clai(ed inde(nit! fro( the insurer. Is the insurer lia*le under theinsurance coerage Wh! or wh! not ;)&<

AII

entered into a contract with BB for the latter to transport ladies wear fro( Manila to?rance with tranship(ent ia 'aiwan. 5o(ehow the goods were not loaded in 'aiwan onti(e hence these arried in ?rance "off-season." was onl! paid for onehalf ;12< thealue *! the *u!er.

clai(ed da(ages fro( BB. BB ino,ed prescription as a defense under the :arriage

of @oods *! 5ea ct. :onsidering the "loss of alue" of the ladies wear as clai(ed *! is BBOs defense tena*le #$plain. ;)&<

AIII

aolo the owner of an ocean-going essel offered to transport the logs of :onstantfro( Manila to Cago!a. :onstantino accepted the offer not ,nowing that the essel w(anned *! an irresponsi*le crew with deep-seated resent(ents against aolo te(plo!er.

:onstantino insured the cargo of logs against *oth perils of the sea and *arratr!. 'he lwere i(properl! loaded on one side there*! causing the essel to tilt on one side. n

wa! to Cago!a the crew un*olted the sea ales of the essel causing water to floodship hold. 'he essel san,.

:onstantino tried to collect fro( the insurance co(pan! which denied lia*ilit! gienunworthiness of *oth the essel and its crew.

:onstantino countered that he was not the owner of the essel and he could therefore *e responsi*le for conditions a*out which he was innocent.

Is the insurance co(pan! lia*le Wh! or wh! not ;)&<

What is "*arratr!" in (arine insurance ;2&<

AI8

When ::I/#C'L Ban, folded up due to insolenc! Manuel had the followseparate deposits in his na(e> 200000 in saings depositN 2%0000 in ti(e depo%0000 in a current accountN 1 (illion in a trust accountN and ) (illion in (on(ar,et place(ent. =nder the hilippine /eposit Insurance :orporation ct how (could Manuel recoer #$plain. ;2&<

A8

While acationing in Boraca! 8alentino surreptitiousl! too, photographs of his girlfriMonalia in her s,i(p! *i,ini. 'wo wee,s later her photographs appeared in the Inteand in a national cele*rit! (againe.

Monalia found out that 8alentino had sold the photographs to the (againe and addinsult to in9ur! uploaded the( to his personal *log on the Internet.


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Monalia filed a co(plaint against 8alentino for da(ages *ased on a(ong other groundsiolation of her intellectual propert! rights. /oes she hae an! cause of action #$plain.;2&<

8alentinoOs friend ?rancesco stole the photographs and duplicated the( and sold the( to a(againe pu*lication. 8alentino sued ?rancesco for infringe(ent and da(ages. /oes8alentino hae an! cause of action #$plain. ;2&<

/oes Monalia hae an! cause of action against ?rancesco #$plain. ;2&<

A8I

n i(porter of :hrist(as to!s loaded 100 *o$es of 5anta :laus tal,ing dolls a*oard aship in Jorea *ound for Manila. With the intention of s(uggling one-half of his cargo hetoo, a *ill of lading for onl! %0 *o$es. n the o!age to Manila %0 *o$es were 9ettisonedto sae the (ore precious cargo.

Is the i(porter entitled to receie an! inde(nit! for aerage #$plain. ;2&<

What are the t!pes of aerages in (arine co((erce ;)&<

A8II

'he 5upre(e :ourt has held that fraud is an e$ception to the "independence principle"goerning letters of credit. #$plain this principle and gie an e$a(ple of how fraud can *ean e$ception. ;)&<

A8III

?or !ears H has *een engaged in the parallel i(portation of fa(ous *rands includingshoes carr!ing the foreign *rand M@I:. #$clusie distri*utor A de(ands that H ceasei(portation *ecause of his appoint(ent as e$clusie distri*utor of M@I: shoes in thehilippines.

H counters that the trade(ar, M@I: is not registered with the Intellectual ropert!ffice as a trade(ar, and therefore no one has the right to preent its parallel i(portation.

Who is correct Wh! ;2&<

5uppose the shoes are coered *! a hilippine patent issued to the *rand owner wwould !our answer *e #$plain. ;2&<

AIA

/r. Co*el discoered a new (ethod of treating lhei(erOs inoling a special (ethoddiagnosing the disease treating it with a new (edicine that has *een discoered after l

e$peri(entation and field testing and noel (ental iso(etric e$ercises. 3e co(es to for adice on how he can hae his discoeries protected.

:an he legall! protect his new (ethod of diagnosis the new (edicine and the n(ethod of treat(ent If no wh! If !es how ;&<

C'3IC@ ?LLW5.

2011Bar Examination Qu!tionnair "or #ommr$ia L

St A

;1< rode a 5entinel Liner *us going to Baguio fro( Manila. t a stop-oer in 'arlac *us drier the conductor and the passengers dise(*ar,ed for lunch. decided howe

to re(ain in the *us the door of which was not loc,ed. t this point 8 a endor sneainto the *us and offered so(e refresh(ents. When rudel! declined 8 attac,ed hresulting in suffering fro( *ruises and contusions. /oes he hae cause to sue 5entiLiner

;< Hes since the carrier7s crew did nothing to protect a passenger who re(aiin the *us during the stop-oer.;B< Co since the carrier7s crew could not hae foreseen the attac,.;:< Hes since the *us is lia*le for an!thing that goes wrong in the course of a t;/< Co since the attac, on too, place when the *us was at a stop-oer.

;2< cargo ship of A 5hipping :o. ran aground off the coast of :e*u during a stor( lost all its cargo a(ounting to hp%0 Million. 'he ship itself suffered da(ages esti(aat hpE0 Million. 'he cargo owners filed a suit against A 5hipping *ut it ino,ed doctrine of li(ited lia*ilit! since its essel suffered an hpE0 Million da(age (ore t

the collectie alue of all lost cargo. Is A 5hipping correct;< Hes since under that doctrine the alue of the lost cargo and the da(agthe ship can *e set-off.;B< Co since each cargo owner has a separate and indiidual clai( for da(age;:< Hes since the e$tent of the shipOs da(age was greater than that of the aluethe lost cargo.


15/51


;/< Co since A 5hipping neither incurred a total loss nor a*andoned its ship.;)< writes a pro(issor! note in faor of his creditor B. It sa!s> "5u*9ect to (! option I pro(ise to pa! B hp1 Million or his order or gie hp1 Million worth of ce(ent or toauthorie hi( to sell (! house worth hp1 Million. 5igned ." Is the note negotia*le

;< Co *ecause the e$ercise of the option to pa! lies with the (a,er andde*tor.;B< Co *ecause it authories the sale of collateral securities in case the note is not

paid at (aturit!.;:< Hes *ecause the note is reall! pa!a*le to B or his order the other proisions *eing (erel! optional.;/< Hes *ecause an election to re+uire so(ething to *e done in lieu of pa!(ent of (one! does not affect negotia*ilit!.

;< B: :orp. increased its capital stoc,s fro( hp10 Million to hp1% Million and inthe process issued 1000 new shares diided into :o((on 5hares "B" and :o((on5hares ":." ' a stoc,holder owning %00 shares insists on *u!ing the newl! issued sharesthrough a right of pre-e(ption. 'he co(pan! clai(s howeer that its B!-laws den! 'an! right of pre-e(ption. Is the corporation correct

;< Co since the B!-Laws cannot den! a shareholder his right of pre-e(ption.;B< Hes *ut the denial of his pre-e(ptie right e$tends onl! to %00 shares.;:< Hes since the denial of the right under the B!-laws is *inding on '.

;/< Co since pre-e(ptie rights are goerned *! the articles of incorporation.;%< M (a,es a pro(issor! note that states> "I M pro(ise to pa! hp%000.00 to B or *earer. 5igned M." M negotiated the note *! delier! to B B to C and C to . B had,nown that M was *an,rupt when M issued the note. Who would *e lia*le to

;< M and C since the! (a! *e assu(ed to ,now of M7s *an,ruptc!;B< C *eing 7s i((ediate negotiator of a *earer note;:< B M and C *eing indorsers *! delier! of a *earer note;/< B haing ,nown of M7s *an,ruptc!

;6< 5 deliered 10 *o$es of cellphones to 're, Bus Liner for transport fro( Manila toIlocos 5ur on the following da! for which 5 paid the freightage. Meanwhile the *o$eswere stored in the *us linerOs *odega. 'hat night howeer a ro**er *ro,e into the *odegaand stole 5Os *o$es. 5 sues 're, Bus Liner for contractual *reach *ut the latter argues that5 has no cause of action *ased on such *reach since the loss occurred while the goods

awaited transport. Who is correct;< 'he *us liner since the goods were not lost while *eing transported.;B< 5 since the goods were unconditionall! placed with ' for transportation.;:< 5 since the freightage for the goods had *een paid.;/< 'he *us liner since the loss was due to a fortuitous eent.

;F< A :orp. operates a call center that receied orders for pias on *ehalf of H :owhich operates a chain of pia restaurants. 'he two co(panies hae the sa(e setcorporate officers. fter 2 !ears A :orp. dis(issed its call agents for no apparent reas'he agents filed a collectie suit for illegal dis(issal against *oth A :orp. and H :o *ased on the doctrine of piercing the eil of corporate fiction. 'he latter set up the defethat the agents are in the e(plo! of A :orp. which is a separate 9uridical entit!. Is tdefense appropriate

;< Co since the doctrine would appl! the two co(panies haing the sa(e secorporate officers.;B< Co the real e(plo!er is H :orp. the pia co(pan! with A :orp. seringan ar( for receiing its outside orders for pias.;:< Hes it is not shown that one co(pan! co(pletel! do(inates the financ policies and *usiness practices of the other.;/< Hes since the two co(panies perfor( two distinct *usinesses.

;E< negotia*le instru(ent can *e indorsed *! wa! of a restrictie indorse(ent wh prohi*its further negotiation and constitutes the indorsee as agent of the indorser.agent the indorsee has the right a(ong others to

;< de(and pa!(ent of the instru(ent onl!.;B< notif! the drawer of the pa!(ent of the instru(ent.;:< receie pa!(ent of the instru(ent.

;/< instruct that pa!(ent *e (ade to the drawee.;K< =nder the Cegotia*le Instru(ents Law a signature *! procuration operates as a nothat the agent has *ut a li(ited authorit! to sign. 'hus a person who ta,es a *ill thadrawn accepted or indorsed *! procuration is dut!-*ound to in+uire into the e$tent ofagent7s authorit! *!>

;< e$a(ining the agentOs special power of attorne!.;B< e$a(ining the *ill to deter(ine the e$tent of such authorit!.;:< as,ing the agent a*out the e$tent of such authorit!.;/< as,ing the principal a*out the e$tent of such authorit!.

;10< =nder the Cegotia*le Instru(ents Law if the holder has a lien on the instru(which arises either fro( a contract or *! i(plication of law he would *e a holder alue to the e$tent of

;< his successor7s interest.

;B< his predecessor7s interest.;:< the lien in his faor.;/< the a(ount indicated on the instru(ent7s face.

;11< 'he lia*ilit! of a co((on carrier for the goods it transports *egins fro( the ti(e o;< conditional receipt.;B< constructie receipt.


16/51


;:< actual receipt.;/< either actual or constructie receipt.

;12< n AOs failure to pa! his loan to B: Ban, the latter foreclosed the 4eal #stateMortgage he e$ecuted in its faor. 'he auction sale was set for /ec. 1 2010 with thenotices of sale pu*lished as the law re+uired. 'he sale was howeer cancelled when /ec.1 2010 was declared a holida! and re-scheduled to an. 10 2011 without repu*lication of notice. 'he auction sale then proceeded on the new date. =nder the circu(stances the

auction sale is;< rescissi*le.;B< unenforcea*le.;:< oid.;/< oida*le.

;1)< A e$ecuted a pro(issor! note with a face alue of hp%0000.00 pa!a*le to the order of H. H indorsed the note to G to who( H owed hp)0000.00. If A has no defense at allagainst H for how (uch (a! G collect fro( A

;< hp20000.00 as he is a holder for alue to the e$tent of the difference *etween H7s de*t and the alue of the note.;B< hp)0000.00 as he is a holder for alue to the e$tent of his lien.;:< hp%0000.00 *ut with the o*ligation to hold hp20000.00 for H7s *enefit.;/< Cone as G7s re(ed! is to run after his de*tor H.

;1< =nder the nti-Mone! Laundering Law a coered institution is re+uired to (aintaina s!ste( of erif!ing the true identit! of their clients as well as persons purporting to acton *ehalf of

;< those doing *usiness with such clients.;B< un,nown principals.;:< the coered institution.;/< such clients.

;1%< It is settled that neither par alue nor *oo, alue is an accurate indicator of the fair alue of a share of stoc, of a corporation. s to unpaid su*scriptions to its shares of stoc,as the! are regarded as corporate assets the! should *e included in the

;< capital alue.;B< *oo, alue.;:< par alue.

;/< (ar,et alue.;16< sold to M 10 gra(s of sha*u worth hp%000.00. s he had no (one! at the ti(e of the sale M wrote a pro(issor! note pro(ising to pa! or his order hp%000. thenindorsed the note to A ;who did not ,now a*out the sha*u


17/51


the e$tensie (ileage that the ship had accu(ulated. Ma! the insurer *e (ade to answer for the da(age to the cargo and the ship

;< Hes *ecause the insurance polic! coered an! or all da(age arising fro( perils of the sea.;B< Hes since there appears to hae *een no fault on the part of the shipowner andshipcaptain.;:< Co since the pro$i(ate cause of the da(age was the *reach of warrant! of

seaworthiness of the ship.;/< Co since the pro$i(ate cause of the da(age was due to ordinar! usage of theship and thus not due to a peril of the sea.

;22< A has *een a long-ti(e household helper of G. A7s hus*and H has also *een G7s long-ti(e drier. Ma! G insure the lies of *oth A and H with G as *eneficiar!

;< Hes since A and H render serices to G.;B< Co since A and H hae no pecuniar! interest on the life of G arising fro(their e(plo!(ent with hi(.;:< Co since G has no pecuniar! interest in the lies of A and H arising fro( their e(plo!(ent with hi(.;/< Hes since A and H are GOs e(plo!ees.

;2)< A :o. a partnership is co(posed of ;capitalist partner


18/51


;)0< / de*tor of : wrote a pro(issor! note pa!a*le to the order of :. :7s *rother M(isrepresenting hi(self as :Os agent o*tained the note fro( / then negotiated it to Cafter forging :7s signature. C indorsed it to # who indorsed it to ? a holder in due course.Ma! ? recoer fro( #

;< Co since the forger! of :7s signature results in the discharge of #.;B< Hes since onl! the forged signature is inoperatie and # is *ound as indorser.;:< Co since the signature of : the pa!ee was forged.

;/< Hes since the signature of : is i((aterial he *eing the pa!ee.;)1< (aterial alteration of an instru(ent without the assent of all parties lia*le thereonresults in its aoidance #A:#' against a

;< prior indorsee.;B< su*se+uent acceptor.;:< su*se+uent indorser.;/< prior acceptor.

;)2< A constituted a chattel (ortgage on a car ;alued at hp1 Million pesos< to secure a%00000.00 loan. ?or the (ortgage to *e alid A should hae

;< the right to (ortgage the car to the e$tent of half its alue.;B< ownership of the car.;:< un+ualified free disposal of his car.;/< registered the car in his na(e.

;))< B *orrowed hp1 (illion fro( L and offered to hi( his BMW car worth hp1Million as collateral. B then e$ecuted a pro(issor! note that reads> "I B pro(ise to pa! Lor *earer the a(ount of hp1 Million and to ,eep (! BMW car ;loan collateral< free fro(an! other encu(*rance. 5igned B." Is this note negotia*le

;< Hes since it is pa!a*le to *earer.;B< Hes since it contains an unconditional pro(ise to pa! a su( certain in (one!.;:< Co since the pro(ise to 9ust pa! a su( of (one! is unclear.;/< Co since it contains a pro(ise to do an act in addition to the pa!(ent of (one!.

;)< *an, can *e placed under receiership when if allowed to continue in *usiness itsdepositors or creditors would incur

;< pro*a*le losses;B< ineita*le losses

;:< possi*le losses;/< a slight chance of losses;)%< #?@ ?oundation Inc. a non-profit organiation scheduled an election for its si$-(e(*er Board of 'rustees. A H and G who are (inorit! (e(*ers of the foundationwish to e$ercise cu(ulatie oting in order to protect their interest although the

?oundation7s rticles and B!-laws are silent on the (atter. s to each of the three whathe (a$i(u( nu(*er of otes that heshe can cast

;< 6;B< K;:< 12;/< )

;)6< If the drawer and the drawee are the sa(e person the holder (a! present

instru(ent for pa!(ent without need of a preious present(ent for acceptance. In succase the holder treats it as a;< non-negotia*le instru(ent.;B< pro(issor! note.;:< letter of credit.;/< chec,.

;)F< / draws a *ill of e$change that states> "ne (onth fro( date pa! to B or his ordhp100000.00. 5igned /." 'he drawee na(ed in the *ill is #. B negotiated the *ill toM to C C to and to . /ue to non-acceptance and after proceedings for dishonwere (ade as,ed to pa! which did. ?ro( who( (a! recoer

;< B *eing the pa!ee;B< C as indorser to ;:< # *eing the drawee

;/< / *eing the drawer ;)E< ' an associate attorne! in AHG Law ffice wrote a newspaper pu*lisher a letdisputing a colu(nistOs clai( a*out an incident in the attorne!Os fa(il!. ' used the fir(Os letterhead and its co(puter in preparing the letter. ' also re+uested the fir((essenger to delier the letter to the pu*lisher. Who owns the cop!right to the letter

;< ' since he is the original creator of the contents of the letter.;B< Both ' and the pu*lisher one wrote the letter to the other who has possessof it.;:< 'he law office since ' was an e(plo!ee and he wrote it on the fir(letterhead.;/< 'he pu*lisher to who( the letter was sent.

;)K< # receied goods fro( ' for displa! and sale in #7s store. # was to turn oer to ' proceeds of an! sale and return the ones unsold. 'o docu(ent their agree(ent # e$ecu

a trust receipt in 'Os faor coering the goods. When # failed to turn oer the procefro( his sale of the goods or return the ones unsold despite de(and he was chargedcourt for estafa. # (oed to dis(iss on the ground that his lia*ilit! is onl! ciil. Iscorrect

;< Co since he co((itted fraud when he pro(ised to pa! for the goods andnot.


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;B< Co since his *reach of the trust receipt agree(ent su*9ects hi( to *oth ciiland cri(inal lia*ilit! for estafa.;:< Hes since # cannot *e charged with estafa oer goods coered a trust receipt.;/< Hes since it was (erel! a consign(ent sale and the *u!er could not pa!.

;0< 'he authoried alteration of a warehouse receipt which does not change its tenor renders the warehouse(an lia*le according to the ter(s of the receipt

;< in its original tenor if the alteration is (aterial.

;B< in its original tenor.;:< as altered if there is fraud.;/< as altered.

;1< n! agree(ent *inding upon the holder to e$tend the ti(e of pa!(ent or to postponethe holder7s right to enforce the instru(ent results in the discharge of the part! secondaril!lia*le unless (ade with the latter7s consent. 'his agree(ent refers to one which the holder (ade with the

;< principal de*tor.;B< principal creditor.;:< secondar! creditor.;/< secondar! de*tor.

;2< =pon e$ecution of a trust receipt oer goods the part! who is o*liged to release suchgoods and who retains securit! interest on those goods is called the

;< holder.;B< shipper.;:< entrustee.;/< entrustor.

;)< A warehouse(an sent a te$t (essage to H to who( A had issued a warehousereceipt for H7s %00 sac,s of corn notif!ing hi( of the due date and ti(e to settle thestorage fees. 'he (essage stated also that if H does not settle the warehouse chargeswithin 10 da!s he will adertise the goods for sale at a pu*lic auction. When H ignoredthe de(and A sold 100 sac,s of corn at a pu*lic auction. ?or AOs failure to co(pl! withthe statutor! re+uire(ent of written notice to satisf! his lien the sale of the 100 sac,s of corn is

;< oida*le.;B< rescissi*le.

;:< unenforcea*le.;/< oid.;< n une 1 2011 A (ailed to H Insurance :o. his application for life insurance with pa!(ent for % !ears of pre(iu( enclosed in it. n ul! 21 2011 the insurance co(pan!accepted the application and (ailed on the sa(e da! its acceptance plus the coer note. Itreached A7s residence on ugust 11 2011. But as it happened on ugust 2011 A

figured in a car accident. 3e died a da! later. Ma! A7s heirs recoer on the insura polic!

;< Hes since under the :ognition 'heor! the insurance contract was perfecupon acceptance *! the insurer of A7s application.;B< Co since there is no priit! of contract *etween the insurer and AOs heirs.;:< Co since A had no ,nowledge of the insurer7s acceptance of his applicat *efore he died.

;/< Hes since under the Manifestation 'heor! the insurance contract perfected upon acceptance of the insurer of A7s application.;%< *ill of e$change has / as drawer # as drawee and ? as pa!ee. 'he *ill was thindorsed to @ @ to 3 and 3 to I. I the current holder presented the *ill to # acceptance. # accepted *ut as it later turned out / is a fictitious person. Is # freed frlia*ilit!

;< Co since *! accepting # ad(its the e$istence of the drawer.;B< Co since *! accepting # warrants that he is solent.;:< Hes if # was not aware of that fact at the ti(e of acceptance.;/< Hes since a *ill of e$change with a fictitious drawer is oid and ine$istent.

;6< /ue to his de*t to : / wrote a pro(issor! note which is pa!a*le to the order of:7s *rother M (isrepresenting hi(self as agent of : o*tained the note fro( /. M thnegotiated the note to C after forging the signature of :. Ma! C enforce the note aga

/ ;< Hes since / is the principal de*tor.;B< Co since the signature of : was forged.;:< Co since it is : who can enforce it the note *eing pa!a*le to the order of :;/< Hes since / as (a,er is pri(aril! lia*le on the note.

;F< ' :orp. has a corporate ter( of 20 !ears under its rticles of Incorporation or frune 1 1KE0 to une 1 2000. n une 1 1KK1 it a(ended its rticles of Incorporatione$tend its life *! 1% !ears fro( une 1 1KE0 to une 1 201%. 'he 5#: approed ta(end(ent. n une 1 2011 howeer ' :orp decided to shorten its ter( *! 1 !earuntil une 1 201. Both the 1KK1 and 2011 a(end(ents were approed *! (a9orit! of its Board of /irectors and ratified in a special (eeting *! its stoc,holders represenat least 2) of its outstanding capital stoc,. 'he 5#: howeer disapproed the 2a(end(ent on the ground that it cannot *e (ade earlier than % !ears prior to

e$piration date of the corporate ter( which is une 1 201. Is this 5#: disapprocorrect;< Co since the %-!ear rule on a(end(ent of corporate ter( applies onl!e$tension not to shortening of ter(.;B< Hes an! a(end(ent affecting corporate ter( cannot *e (ade earlier tha!ears prior to the corporationOs e$piration date.


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;:< Co since a corporation can in fact hae a corporate life of %0 !ears.;/< Hes the a(end(ent to shorten corporate ter( cannot *e (ade earlier than %!ears prior to the corporationOs e$piration date.

;E< B while drun, accepted a passenger in his ta$ica*. B then droe the ta$i rec,lessl!and ineita*l! it crashed into an electric post resulting in serious ph!sical in9uries to the passengers. 'he latter then filed a suit for tort against B7s operator *ut raised thedefense of haing e$ercised e$traordinar! diligence in the safet! of the passenger. Is his

defense tena*le;< Hes as a co((on carrier can re*ut the presu(ption of negligence *! raisingsuch a defense.;B< Co as in tort actions the proper defense is due diligence in the selection andsuperision of the e(plo!ee *! the e(plo!er.;:< Co as B the co((on carrier7s e(plo!ee was o*iousl! negligent due to hisinto$ication.;/< Hes as a co((on carrier can ino,e e$traordinar! diligence in the safet! of passengers in tort cases.

;K;< does not e$ceed 2%& of the outstanding capital stoc,.;B< e$ceeds 2%& of the outstanding capital stoc,.;:< e$ceeds 20& of the outstanding capital stoc,.;/< does not e$ceed 20& of the outstanding capital stoc,.


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;%6< A an a(ateur astrono(er stu(*led upon what appeared to *e a (assie olcaniceruption in upiter while peering at the planet through his telescope. 'he following wee,A without notes presented a lecture on his findings *efore the ssociation of strono(ers of the hilippines. 'o his dis(a! he later read an article in a science 9ournalwritten *! H a professional astrono(er repeating e$actl! what A discoered without an!attri*ution to hi(. 3as H infringed on A7s cop!right if an!

;< Co since A did not reduce his lecture in writing or other (aterial for(.

;B< Hes since the lecture is considered AOs original wor,.;:< Co since no protection e$tends to an! discoer! een if e$pressede$plained illustrated or e(*odied in a wor,.;/< Hes since HOs article failed to (a,e an! attri*ution to A.

;%F< In case of disagree(ent *etween the corporation and a withdrawing stoc,holder whoe$ercises his appraisal right regarding the fair alue of his shares a three-(e(*er groupshall *! (a9orit! ote resole the issue with finalit!. Ma! the wife of the withdrawingstoc,holder *e na(ed to the three(e(*er group

;< Co the wife of the withdrawing shareholder is not a disinterested person.;B< Hes since she could *est protect her hus*and7s shareholdings.;:< Hes since the rules do not discri(inate against wies.;/< Co since the stoc,holder hi(self should sit in the three-(e(*er group.

;%E< part fro( econo(ic rights the author of a cop!right also has (oral rights which he

(a! transfer *! wa! of assign(ent. 'he ter( of these (oral rights shall last;< during the author7s lifeti(e and for %0 !ears after his death.;B< foreer.;:< %0 !ears fro( the ti(e the author created his wor,.;/< during the author7s lifeti(e.

;%K< Which of the following indorsers e$pressl! warrants in negotiating an instru(ent that1< it is genuine and trueN 2< he has a good title to itN )< all prior parties hae capacit! tonegotiateN and < it is alid and su*sisting at the ti(e of his indorse(ent

;< 'he irregular indorser.;B< 'he regular indorser.;:< 'he general indorser.;/< 'he +ualified indorser.

;60< Where the insurer was (ade to pa! the insured for a loss coered *! the insurance

contract such insurer can run after the third person who caused the loss throughsu*rogation. What is the *asis for conferring the right of su*rogation to the insurer;< 'heir e$press stipulation in the contract of insurance.;B< 'he e+uita*le assign(ent that results fro( the insurerOs pa!(ent of theinsured.;:< 'he insuredOs for(al assign(ent of his right to inde(nification to the insurer.

;/< 'he insuredOs endorse(ent of its clai( to the insurer.;61< A inented a deice which through the use of noise can recharge a cellphone *att3e applied for and was granted a patent on his deice effectie within the hilippinesit turns out a !ear *efore the grant of A7s patent H also an inentor inented a si(ideice which he used in his cellphone *usiness in Manila. But A files an in9unctie sagainst H to stop hi( fro( using the deice on the ground of patent infringe(ent. Willsuit prosper

;< Co since the correct re(ed! for A is a ciil action for da(ages.;B< Co since H is a prior user in good faith.;:< Hes since A is the first to register his deice for patent registration.;/< Hes since H unwittingl! used AOs patented inention.

;62< a sales girl in a flower shop at the !ala 5tation of the Metro 4ail 'ransit ;M4 *ought two to,ens or tic,ets one for her ride to wor, and another for her ride ho(e. got to her flower shop where she usuall! wor,ed fro( E a.(. to % p.(. t a*out ) p.while was attending to her duties at the flower shop two crews of the M4' got intfight near the flower shop causing in9uries to in the process. :an sue the M4' contractual *reach as she was within the M4' pre(ises where she would shortl! ta,eride ho(e

;< Co since the incident too, place not in an M4' train coach *ut at the Mstation.

;B< Co since had no intention to *oard an M4' train coach when the incidoccured.;:< Hes since she alread! had a tic,et for her ride ho(e and was in the M4 pre(ises at the ti(e of the incident.;/< Hes since she *ought a round trip tic,et and M4' had a dut! while she waits station to ,eep her safe for her return trip.

;6)< ?orger! of *ills of e$change (a! *e su*diided into a< forger! of an indorse(enthe *ill and *< forger! of the drawer7s signature which (a! either *e with acceptancethe drawee or

;< with acceptance *ut the *ill is paid *! the drawee.;B< without acceptance *ut the *ill is paid *! the drawer.;:< without acceptance *ut the *ill is paid *! the drawee.;/< with acceptance *ut the *ill is paid *! the drawer.

;6< If an insurance polic! prohi*its additional insurance on the propert! insured withthe insurer7s consent such proision *eing alid and reasona*le a iolation *! the insu;< reduces the alue of the polic!.;B< aoids the polic!.;:< offsets the alue of the polic! with the additional insurancesOs alue.;/< forfeits pre(iu(s alread! paid.


22/51


;6%< A found a chec, on the street drawn *! H against B: Ban, with G as pa!ee. Aforged G7s signature as an indorser then indorsed it personall! and deliered it to /#?Ban,. 'he latter in turn indorsed it to B: Ban, which charged it to the HOs account. Hlater sued B: Ban, *ut it set up the forger! as its defense. Will it prosper

;< Co since the pa!ee7s signature has *een forged.;B< Co since HOs re(ed! is to run after the forger A.;:< Hes since forger! is onl! a personal defense.

;/< Hes since B: Ban, is *ound to ,now the signature of H its client.;66< 'he rule is that no stoc, diidend shall *e issued without the approal of stoc,holdersrepresenting at least 2) of the outstanding capital stoc, at a regular or special (eetingcalled for the purpose. s to other for(s of diidends>

;< a (ere (a9orit! of the entire Board of /irectors applies.;B< a (ere (a9orit! of the +uoru( of the Board of /irectors applies.;:< a (ere (a9orit! of the otes of stoc,holders representing the outstandingcapital stoc, applies.;/< the sa(e rule of 2) otes applies.

;6F< A at HOs re+uest e$ecuted a 4eal #state Mortgage ;4#M< on his ;AOs< land to secureH7s loan fro( G. G successfull! foreclosed the 4#M when H defaulted on the loan *ut half of H7s o*ligation re(ained unpaid. Ma! G sue A to enforce his right to the deficienc!

;< Hes *ut solidaril! with H.

;B< Hes since AOs is dee(ed to warrant that his land would coer the wholeo*ligation.;:< Co since it is the *u!er at the auction sale who should answer for thedeficienc!.;/< Co *ecause A is not GOs de*tor.

;6E< Ma! a pu*licl! listed uniersal *an, own 100& of the oting stoc,s in another uniersal *an, and in a co((ercial *an,

;< Hes if with the per(ission of the Bang,o 5entral ng ilipinas.;B< Co since it has no power to inest in e+uities.;:< Hes as there is no prohi*ition on it.;/< Co since under the law the 100& ownership on oting stoc,s (ust *e ineither *an, onl!.

;6K< erils of the ship under (arine insurance law refer to loss which in the ordinar!

course of eents results fro(;< natural and ineita*le actions of the sea.;B< natural and ordinar! actions of the sea.;:< unnatural and ineita*le actions of the sea.;/< unnatural and ordinar! actions of the sea.

;F0< =nder the Intellectual ropert! :ode lectures ser(ons addresses or dissertatio prepared for oral delier! whether or not reduced in writing or other (aterial for(s regarded as

;< non-original wor,s.;B< original wor,s.;:< deriatie wor,s.;/< not su*9ect to protection.

;F1< :an a drawee who accepts a (ateriall! altered chec, recoer fro( the holder anddrawer;< Co he cannot recoer fro( either of the(.;B< Hes fro( *oth of the(.;:< Hes *ut onl! fro( the drawer.;/< Hes *ut onl! fro( the holder.

;F2< 'he rule is that the intentional cancellation of a person secondaril! lia*le resultthe discharge of the latter. With respect to an indorser the holder7s right to cancel signature is>

;< without li(itation.;B< not li(ited to the case where the indorse(ent is necessar! to his title.;:< li(ited to the case where the indorse(ent is not necessar! to his title.;/< li(ited to the case where the indorse(ent is necessar! to his title.

;F)< A in the hospital for ,idne! d!sfunction was a*out to *e discharged when he (etfriend H. A told H the reason for his hospitaliation. (onth later A applied for insurance coering serious illnesses fro( B: Insurance :o. where H was wor,ing:orporate 5ecretar!. 5ince A had alread! told H a*out his hospitaliation he no lonanswered a +uestion regarding it in the application for(. Would this consticonceal(ent

;< Hes since the preious hospitaliation would influence the insurer in decidwhether to grant A7s application.;B< Co since H (a! *e regarded as B:Os agent and he alread! ,new of A preious hospitaliation.;:< Hes it would constitute conceal(ent that a(ounts to (isrepresentation on part.;/< Co since the preious illness is not a (aterial fact to the insurance coerag

;F< 5eeral (erican doctors wanted to set up a group clinic in the hilippines so thcould render (odern (edical serices. If the clinic is to *e incorporated under our lawwhat is the re+uired foreign e+uit! participation in such a corporation

;< 0&;B< 0&;:< 60&


23/51


;/< F0&;F%< A e$ecuted a pro(issor! note in faor of H *! wa! of acco((odation. It sa!s> "a!to H or order the a(ount of hp%0000.00. 5igned A." H then indorsed the note to G andG to '. When ' sought collection fro( H the latter countered as indorser that there shouldhae *een a present(ent first to the (a,er who dishonors it. Is H correct

;< Co since H is the real de*tor and thus there is no need for present(ent for pa!(ent and dishonor *! the (a,er.;B< Hes since as an indorser who is secondaril! lia*le there (ust first *e present(ent for pa!(ent and dishonor *! the (a,er.;:< Co since the a*solute rule is that there is no need for present(ent for pa!(ent and dishonor to hold an indorser lia*le.;/< Hes since the secondar! lia*ilit! of H and G would onl! arise after present(ent for pa!(ent and dishonor *! the (a,er.

;F6< 'he Board of /irectors of AHG :orp. unani(ousl! passed a 4esolution approingthe ta,ing of steps that in realit! a(ounted to willful ta$ easion. n discoering this thegoern(ent filed ta$ easion charges against all the co(pan!Os (e(*ers of the *oard of directors. 'he directors ino,ed the defense that the! hae no personal lia*ilit! *eing(ere directors of a fictional *eing. re the! correct

;< Co since as a rule onl! natural persons li,e the (e(*ers of the *oard of directors can co((it corporate cri(es.

;B< Hes since it is the corporation that did not pa! the ta$ and it has a personalit!distinct fro( its directors.;:< Hes since the directors officiall! and collectiel! perfor(ed acts that arei(puta*le onl! to the corporation.;/< Co since the law (a,es directors of the corporation solidaril! lia*le for grossnegligence and *ad faith in the discharge of their duties.

;FF< ' is the registered trade(ar, owner of ":4:5" which he uses on his read!-to-wear clothes. Ban,ing on the popularit! of '7s trade (ar, B ca(e up with his own":4:5" (ar, which he then used for his ":4:5" *urgers. ' now sues B for trade(ar, infringe(ent *ut B argues that his product is a *urger hence there is noinfringe(ent. Is B correct

;< Co since the owner of a well-,nown (ar, registered in the hilippines hasrights that e$tends een to dissi(ilar ,inds of goods.

;B< Hes since the right of the owner of a well-,nown (ar, registered in thehilippines does not e$tend to goods which are not of the sa(e ,ind.;:< Hes as B was in *ad faith in co(ing up with his own ":4:5" (ar,.;/< Co since unli,e ' he did not register his own ":4:5" (ar, for his product.

;FE< the proprietor of a fleet of ten ta$ica*s decides to adopt as his *usiness na(e'ransport :o. Inc." Ma! this *e allowed

;< Co it would *e deceptie since he is a proprietor not a corporation.;B< Co since "" is a generic na(e not suita*le for registration.;:< Hes since his line of *usiness is pu*lic transportation.;/< Hes since such na(e would gie his *usiness a corporate identit!.

;FK< ' deliers two refrigerators to the warehouse of W who then issues a negotiareceipt underta,ing the delier! of the refrigerators to "' or *earer." ' entrusted receipt to B for safe,eeping onl!. B negotiated it howeer to ? who *ought it in gofaith and for alue. Who is entitled to the delier! of the refrigerators

;< ' since he is the real owner of the refrigerators.;B< ? since he is a purchaser in good faith and for alue.;:< B since ' entrusted the receipt to hi(.;/< W since he has as a warehouse(an a lien on the goods.

;E0< 'he rticles of Incorporation (ust *e acco(panied *! a 'reasurer7s ffidcertif!ing under oath a(ong others that the total su*scription paid is>

;< not less than 2%000.00.;B< not (ore than %000.00.;:< 4I@3' C5W#4 not less than %000.00.;/< not (ore than 2%000.00.

;E1< In a special (eeting called for the purpose 2) of the stoc,holders representing outstanding capital stoc, in A. :o. authoried the co(pan!7s Board of /irectors to a(its B!-laws. B! (a9orit! ote the Board then approed the a(end(ent. Is a(end(ent alid

;< Co since the stoc,holders cannot delegate their right to a(end the B!-lawthe Board.;B< Hes since the (a9orit! otes in the Board was sufficient to a(end the B!-la;:< Co *ecause the oting in the Board should hae *een *! (a9orit! o+uoru(.;/< Hes since the otes of 2) of the stoc,holders and (a9orit! of the Board wsecured.

;E2< group of Mala!sians wanted to inest in the hilippinesO insurance *usiness. negotiations the! agreed to organie "?IM Insurance :orp." with a group of ?ilip

*usiness(en. ?IM would hae a h%0 Million paid up capital h0 Million of whwould co(e fro( the ?ilipino group. ll corporate officers would *e ?ilipinos and E of its 10-(e(*er Board of /irectors would *e ?ilipinos. :an ?IM operate an insura *usiness in the hilippines

;< Co since an insurance co(pan! (ust hae at least hF% Million paidcapital.


24/51


;B< Hes since there is su*stantial co(pliance with our nationaliation lawsrespecting paid-up capital and ?ilipino do(inated Board of /irectors.;:< Hes since ?IMOs paid up capital (ore than (eets the countr!Osnationaliation laws.;/< Co since an insurance co(pan! should *e 100& owned *! ?ilipinos.

;E)< =nder the u*lic 5erice ct an ad(inistratie agenc! has the power to approe proisionall! the rates of pu*lic utilities without a hearing in case of urgent pu*lic needs.'he e$ercise of this power is

;< superisor!.;B< a*solute.;:< discretionar!.;/< (andator!.

;E< A creditor of H o*tained a 9udg(ent in his faor in connection with H7s unpaid loanto hi(. 'he court7s sheriff then leied on the goods that H stored in '7s warehouse for which the latter issued a warehouse receipt. (onth *efore the le! howeer G *oughtthe warehouse receipt for alue. Who has a *etter right oer the goods

;< ' *eing the warehouse(an with a lien on the goods;B< G *eing a purchaser for alue of the warehouse receipt;:< A *eing HOs 9udg(ent creditor ;/< H *eing the owner of the goods

;E%< pro(issor! note states on its face> "I A pro(ise to pa! H the a(ount of hp%000.00 fie da!s after co(pletion of the on-going construction of (! house. 5igned A."Is the note negotia*le

;< Hes since it is pa!a*le at a fi$ed period after the occurrence of a specifiedeent.;B< Co since it is pa!a*le at a fi$ed period after the occurrence of an eent which(a! not happen.;:< Hes since it is pa!a*le at a fi$ed period or deter(ina*le future ti(e.;/< Co since it should *e pa!a*le at a fi$ed period *efore the occurrence of aspecified eent.

;E6< sold to M a pair of gec,o ;tu,o< for hp%0000.00. M then issued a pro(issor! noteto pro(ising to pa! the (one! within K0 da!s. =n,nown to and M a law was passed a(onth *efore the sale that prohi*its and declares oid an! agree(ent to sell gec,o in thecountr!. If A ac+uired the note in good faith and for alue (a! he enforce pa!(ent on it

;< Co since the law declared oid the contract on which the pro(issor! notewas founded.;B< Co since it was not A who *ought the gec,o.;:< Hes since he is a holder in due course of a note which is distinct fro( the saleof gec,o.

;/< Hes since he is a holder in due course and and M were not aware of the that prohi*ited the sale of gec,o.

;EF< authoried to sign a *ill of e$change in his ;Os< na(e. 'he *ill reads> "a! tor order the su( of hp1 (illion. 5igned ;for and in *ehalf of


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;< Hes since the new law cannot *e applied to (e(*ers of the *oard of directorsalread! elected prior to its passage.;B< Co since the dis+ualification ta,es effect *! operation of law it is sufficientthat he was declared no longer a (e(*er of the *oard.;:< Hes since the proisions of the :orporation :ode applies as well togoern(ent-owned and controlled corporations.;/< Co since the *oard has the power to oust hi( een without the new law.

;K1< 002-)E-0001 @ a grocer! goods supplier sold 100 sac,s of rice to 3 who pro(isedto pa! once he has sold all the rice. 3 (eanti(e deliered the goods to W awarehouse(an who issued a warehouse receipt. Without the ,nowledge of @ and W 3negotiated the receipt to who ac+uired it in good faith and for alue. then clai(ed thegoods fro( W who released the(. fter the rice was loaded on a ship *ound for Manila@ ino,es his right to stop the goods in transit due to his unpaid lien. Who has a *etter right to the rice

;< 4I@3' C5W#4 since he has superior rights as a purchaser for alue andin good faith.;B< regardless of whether or not he is a purchaser for alue and in good faith.;:< @ since as an unpaid seller he has the right of stoppage in transitu.;/< W since it appears that the warehouse charges hae not *een paid.

;K2< In a signature *! procuration the principal is *ound onl! in case the agent actedwithin the actual li(its of his authorit!. 'he signature of the agent in such a case operatesas notice that he has

;< a +ualified authorit! to sign.;B< a li(ited authorit! to sign.;:< a special authorit! to sign.;/< full authorit! to sign.

;K)< In return for the 20 !ears of faithful serice of A as a househelper to H the latter pro(ised to pa! hp100000.00 to AOs heirs if he ;A< dies in an accident *! fire. A agreed.Is this an insurance contract

;< Hes since all the ele(ents of an insurance contract are present.;B< Hes since AO serices (a! *e regarded as the consideration.;:< Co since H actuall! (ade a conditional donation in AOs faor.;/< Co since it is in fact an inno(inate contract *etween A and H.

;K< *ill of e$change states on its face> "ne ;1< (onth after sight pa! to the order of Mr. 4 the a(ount of hp%0000.00 chargea*le to the account of Mr. 5. 5igned Mr. '."Mr. 5 the drawee accepted the *ill upon present(ent *! writing on it the words "I shall pa! hp)0000.00 three ;)< (onths after sight." Ma! he accept under such ter(s whicharies the co((and in the *ill of e$change

;< Hes since a drawee accepts according to the tenor of his acceptance.

;B< Co since once he accepts a drawee is lia*le according to the tenor of the *;:< Hes proided the drawer and pa!ee agree to the acceptance.;/< Co since he is *ound as drawee to accept the *ill according to its tenor.

;K%< Ma! the indorsee of a pro(issor! note indorsed to hi( "for deposit" file a suit agathe indorser

;< Hes as long as the indorser receied alue for the restrictie indorse(ent.;B< Hes as long as the indorser receied alue for the conditional indorse(ent.;:< Hes whether or not the indorser receied alue for the conditioindorse(ent.;/< Hes whether or not the indorser receied alue for the restrictie indorse(e

;K6< A issued a chec, in faor of his creditor H. It reads> " a! to H the a(ount of 5e'housand 3undred esos ;hpF00000.00


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;:< Hes since the *ill is pa!a*le to order present(ent is re+uired for acceptance.;/< Hes in order to hold all persons lia*le on the *ill.

;100< 'he corporate ter( of a stoc, corporation is that which is stated in its rticles of Incorporation. It (a! *e e$tended or shortened *! an a(end(ent of the rticles whenapproed *! (a9orit! of its Board of /irectors and>

;< approed and ratified *! at least 2) of all stoc,holders.;B< approed *! at least 2) of the stoc,holders representing the outstandingcapital stoc,.;:< ratified *! at least 2) of all stoc,holders.;/< ratified *! at least 2) of the stoc,holders representing the outstanding capitalstoc,.

20121. Letters of :redit are financial deices in co((ercial transactions which will

ensure that the seller of the goods is sure to *e paid when he parts with the goodsand the *u!er of the goods gets control of the goods upon pa!(ent. Whichstate(ent is (ost accurate

a. 'he use of the Letter of :redit seres to reduce the ris, of nonpa!(ent of the purchase price in a sale transaction.

*. 'he Letters of :redit can onl! *e used e$clusiel! in a sales transaction.c. 'he Letters of :redit are issued for the *enefit of the seller onl!.d. ;a


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a. the warehouse receipt coering the goods is not presented. *. the lien of the warehouse(an is not satisfied.c. the said holder presents a (ateriall! altered warehouse receipt.d. ll of the a*oe.

F. 'he legal re(ed! of the warehouse(an in case of conflicting clai(s is to ---a. file an action for interpleader. *. gie the goods to the first one who first presented the warehouse receipt.c. use his discretion as to who he *eliees has the prior right.d. ,eep the goods and appropriate the( to hi(self.

E. BBB Ban,ing :orporation issued a Letter of :redit in the a(ount of %Millionfor the purchase of fie ;%< tons of corn *! A. =pon arrial of the goods thegoods were deliered to the warehouse of A. 'hereafter he was as,ed to sign a'rust 4eceipt coering the goods. When the goods were sold A did not delier the proceeds to BBB Ban,ing :orporation arguing that he will need the fund for the su*se+uent i(portation. Is there sufficient *asis to sue for cri(inal action

a. Hes *ecause A7s failure to turn oer the proceeds to the *an, is aiolation of the 'rust 4eceipt Law.

*. Co *ecause the trust receipt was signed onl! after the delier! of thegoods. When the trust receipt was signed the ownership of the goods wasalread! with A.

c. Hes *ecause iolation of 'rust 4eceipt Law is (ala prohi*ita intention isirreleant.

d. Co *ecause A has a alid reason not to delier the proceeds to BBBBan,ing :orporation.

K. A secured a loan fro( BBB Ban, to pa! for the i(portation of so(e dried fruits.=pon arrial of the goods consisting of dried fruits i(ported *! A *ut *eforedelier! to hi( a trust receipt was e$ecuted *! A to coer the transfer of the driedfruits to his possession. 'he dried fruits were so salea*le *ut instead of turningoer the proceeds of the sale A used the funds to pa! for the (edical e$penses of his (other who was sic, of cancer of the *one. Which state(ent is (ost accurate

a. A cannot *e held cri(inall! lia*le *ecause although he did not pa! the *an, he used the proceeds for a good reason.

*. ?raud or deceit is a necessar! ele(ent to hold A cri(inall! lia*le for non-pa!(ent under the 'rust 4eceipts Law.

c. A can *e held cri(inall! lia*le under the 'rust 4eceipts Law regardless of the purpose or intention for the use of the proceeds.

d. A cannot *e held cri(inall! lia*le *ecause the underl!ing o*ligation isone of si(ple loan.

10. A is the resident of roducts :orporation. A signs all the 'rust 4ecedocu(ents for certain i(portations of the co(pan!. In the eent of failuredelier the proceeds of the sale of the goods to the *an, which state(ent is (accurate

a. 'he cr

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Mercantile Law Bar Questions 06-14