BAR EXAMINATION 2006

MERCANTILE LAW
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1. What is the doctrine of "piercing the veil of corporate entity?" Explain 2.5%
2. To hat circ!"stances ill the doctrine apply? 2.5%
#. What is the "ini"!" and "axi"!" n!"$er of incorporators re%!ired to incorporate a stoc& corporation? is this also the
sa"e "ini"!" and "axi"!" n!"$er of dicrectors re%!ired in a stoc& corporation? 2.5%
'. (!st all incorporators and directors $e residents of the )hilippines? 2.5%
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*isc!ss the legal conse%!ences hen a $an& honors a forged chec&. 5%
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+!n as a$o!t to leave for a $!siness trip. ,s his !s!al practice- he signed several $lan& chec&s. .e instr!cted /!th- his secretary-
to fill the" as pay"ent for his o$ligations. /!th filled one chec& ith her na"e as payee- placed )#0-000.00 thereon- endorsed and
delivered it to (arie. 1he accepted the chec& in good faith as pay"ent for goods she delivered to /!th. Event!ally- /!th regretted
hat she did and apologi2ed to +!n. I""ediately he directed the draee $an& to dishonor the chec&. When (arie encashed the
chec&. it as dishonored.
1. Is +!n lia$le to (arie? 5%
2. 1!pposing the chec& as stolen hile in /!th3s possession and a thief filled the $lan& chec&- endorsed and deli$vered it to
(arie in pay"ent for the goods he p!rchased fro" her- is +!n lia$le to (arie if the chec& is dishonored? 5%
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/!dy is 5o$less $!t is rep!ted to $e a 5!eteng operator. .e has never $een charged or convicted of any cri"e. .e "aintains several
$an& acco!nts and has p!rchased 5 ho!ses and lots for his children fro" the 6!ansing /ealty I Inc. 1ince he does not have any
visi$le 5o$- the co"pany reported his p!rchases to the ,nti-(oney 6a!ndering 7o!ncil 8,(679. Thereafter- ,(67 charged hi" ith
violation of the ,nti-(oney 6a!ndering 6a. :pon re%!est of the ,(67- the $an& disclosed to it /!dy3s $an& deposits a"o!nting to
)100 (illion. 1!$se%!ently- he as charged in co!rt for violation of the ,nti-(oney 6a!ndering 6a.
1. 7an /!dy "ove to dis"iss the case on the gro!nd that he has no cri"inal record? 2.5%
2. To raise f!nds for his defense- /!dy sold the ho!ses and lots to a friend. 7an 6!ansing /ealty- Inc. $e co"pelled to
transfer to the $!yer onership of the ho!ses and lots? 2.5%
#. In disclosing /!dy3s $an& acco!t;9ts to the ,(67- did the $an& violate any la? 2.5%
'. 1!pposing the titles of the ho!ses and lots are in possession of the 6!ansing /ealty I Inc.- is it !nder o$ligation to deliver
the titles to /!dy? 2.5%
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The )enins!la Ins!rance 7o"pany offered to ins!re <rancis3 $rand ne car against all ris&s in the s!" of )1 (illion for 1 year. The
policy as iss!ed ith the pre"i!" fixed at )=0-000.00 paya$le in = "onths. <rancis only paid the first to "onths install"ents.
*espite de"ands- he failed to pay the s!$se%!ent install"ents. <ive "onths after the iss!ance of the policy- the vehicle as
carnapped. <rancis filed ith the ins!rance co"pany a clai" for its val!e. .oever- the co"pany denied his clai" on the gro!nd that
he failed to pay the pre"i!" res!lting in the cancellation of the policy.
7an <rancis recover fro" the )enins!la Ins!rance 7o"pany? 5%
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1. In several policy addresses extensively covered $y "edia since his appoint"ent on *ece"$er 21- 2005- 7hief +!stice
,rte"io 4. )angani$an voed to leave a 5!diciary characteri2ed $y "fo!r Ins" and to foc!s in solving the "fo!r ,7I*"
pro$le"s that corrode the ad"inistration of 5!stice in o!r co!ntry.
Explain this "fo!r Ins" and "fo!r ,7I*" pro$le"s. 2.5%
2. The 7hief +!stice also said that the 5!diciary "!st "safeg!ard the li$erty" and "n!rt!re the prosperity" of o!r people.
Explain this philosophy. 7ite *ecisions of the 1!pre"e 7o!rt i"ple"enting each of these tin $eacons of the 7hief
+!stice. 2.5%
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1. What is a "!t!al ins!rance co"pany or association? 2.5%
2. *isting!ish $eteen the role of a conservator and that of a receiver of a $an&. 2.5%
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)io is the president of Western >an&. .is ife applied for a loan ith the said $an& to finance an internet cafe. The loan officer told
her that her application ill not $e approved $eca!se the grant of loans to related interests of $an& directors- officers- and
stoc&holders is prohi$ited $y the ?eneral >an&ing 6a.
Explain hether the loan officer is correct. 5%
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The >l!e 1tar 7orporation filed ith the /egional Trial 7o!rt a petition for reha$ilitation on the gro!nd that it foresa the i"possi$ility
of paying its o$ligations as they fall d!e. <inding the petition s!fficient in for" and s!$stance- the co!rt iss!ed an Arder appointing a
reha$ilitation receiver and staying the enforce"ent of all clai"s against the corporation.
What is the rationale for the 1tay Arder? 5%
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1. What acts or o"issions are penali2ed !nder the Tr!st /eceipts 6a? 2.5%
2. Is lac& of intent to defra!d a $ar to the prosec!tion of these acts or o"issions? 2.5%
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:nder /ep!$lic ,ct Bo.1'05 8The >an& 1ecrecy 6a9- $an& deposits are considered a$sol!tely confidential and "ay not $e
exa"ined- in%!ired or loo&ed into $y any person- govern"ent official- $!rea! or office.
What are the exceptions? 5%
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1. Is the 1ec!rities and Exchange 7o""ission the ven!e for actions involving intra-corporate controversies? 2%
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1!pposing ,l$ert Einstein ere alive today and he filed ith the Intellect!al )roperty Affice 8I)A9 an application for patent for his
theory of relativity expressed in the for"!la EC"c2. The I)A disapproved Einstein3s application on the gro!nd that his theory of
relativity is not patenta$le.
Is the I)A3s action correct? 5%
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In a ritten legal opinion for a client on the difference $eteen apprenticeship and learnership- 6i2a %!oted itho!t per"ission a
la$or la expert3s co""ent appearing in his $oo& entitled ",nnotations on the 6a$or 7ode."
7an the la$or la expert hold 6i2a lia$le for infringe"ent of copyright for %!oting a portion of his $oo& itho!t his per"ission? 5%
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, real estate "ortgage "ay $e foreclosed 5!dicially or extra5!dicially.
In hat instance "aya "ortgagee extra5!dicially foreclose a real estate "ortgage? 5%
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)!rs!ant to a rit of exec!tion iss!ed $y the /egional Trial 7o!rt in "Express >an& v. *on /!$io-" the sheriff levied and sold at
p!$lic a!ction D photocopying "achines of *on /!$io. Is the sheriff3s sale covered $y the >!l& 1ales 6a? 5%
NOTHING FOLLOWS.