Professional Documents
Culture Documents
MNHH
MNHH
2011
Commercial law
Prepared by:
ATTY. RENATO S. RONDEZ
b. accumulation of
NEGOTIABLE secondary
contracts -
INSTRUMENTS instrument is
LAW negotiated from
person to person
(Act No. 2031,
June 2, 1911)
Requisites of
Negotiability
Written contracts
for the payment of
An instrument to
money; by its
be negotiable must
form, intended as
conform to
a substitute
the following
for money and
requirements:
intended to pass
a. It must
from hand to
be in writing
hand, to give the
and signed by
holder in due course
maker or drawer;
the right to
b. Must contain
hold the same and
an unconditional
collect the sum due.
promise or order to
pay a sum
certain in money;
Negotiable
c.Must be payable
instruments produce
on demand, or
the effect of
at a fixed or
payment only when
determinable future
they have been encashed
time;
or through
d. Must be payable
the fault of the
to the order or
creditor have been
to bearer;
impaired. (Article
and
1249, NCC)
e. Where the
instrument is
Principal Features
addressed to a
and Characteristics drawee, he must
a. negotiability - right be named or
of transferee to otherwise indicated
hold the instrument therein with reasonable
and collect the certainty.
sum due
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
LAW or banker
LAW against
intermediate
parties Prepared by: ATTY. RENATO S. RONDEZ
indication of
the fund as
the source
of payment
of the
disbursement.
(Metrobank v.
CA, 194 SCRA
169)
2. Since a
postal
money
order is
subject to
restrictions and
limitations
under
postal laws
and issued
by the
Government
which is
not
engaged in
commercial
transactions,
is
governed
NIL.
Educ.
a. If between
REASON: The law immediate parties
does not make any and remote parties
distinction between not holder
a HDC and one in due course,
who is not a to be effectual
HDC. there must be
authorized delivery
by the party
Notes making, drawing,
on accepting or
indorsing. Delivery
Section may be shown
15 to be
conditional or for a
It is a real special purpose
defense. It only
can be interposed
b. If the holder is
against a holder
a holder
in due course.
in due course,
all prior deliveries
Where an
conclusively presumed
INCOMLETE and
valid
UNDELIVERED
instrument is c. If instrument not
in the hands in hands of
of a drawer/maker, valid and
HDC, there is intentional delivery is
PRIMA presumed until
FACIE PRESUMPTION the
of delivery. contrary is proven
(Sec. 16
Defense of the NIL)
maker is to
prove non-delivery him for want
of the of delivery
incomplete instrument. even in the
hands of a
Complete but holder in due
Undelivered: (Sec.16) course
4) But there is
General Rule: prima facie presumption
Every of delivery
contract on a of an instrument
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Per Procuration -
operates as (2004,2006&2009 BEQ)
notice that the agent C. Payees Signature
has a limited
authority to (
sign. 2008 BEQ)
D. Indorsers Signature
Effects: (2008
- The principal in BEQ)
only bound if
the agent acted General rule:
within the A signature,
limits of the authority which is forged
given or made
- The person who without authority is
takes the instrument is wholly
bound to inoperative. (Sec.
inquire into the extent 2
and nature 3
of the )
authority given.
(Sec.
21 NIL) E
f
General rule: f
Infants and corporations e
incur no liability by c
their indorsement t
or assignment s
of an :
instrument.
(Sec. 22 NIL)
Effects:
- No liability attached
to the infant
or the a. No right to retain
corporation
- The instrument is
still valid and the
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Failure of
consideration implies
that consideration
Where value has was intended
at any time been by that it failed to
given for the pass
instrument, the holder The defense
is deemed a of want of
holder for value in consideration is
respect to all ineffective against a
parties who become holder in
such prior to that due course
time. A drawee
(Sec. 26) who accepts
the bill cannot
allege want of
consideration against
the drawer
Absence of
Consideration: Accommodation
(1995 and 1996 knowledge that no
Bar Exam) consideration passed
between the
Effect of want of accommodation and
consideration: accommodated parties.
a. Personal defense to
the prejudice of
a party and Requisites of
available against Accommodation:
any person not 1. The accommodation
holder in due course. party must sign
as maker, drawer,
b. Partial failure of acceptor or
consideration is a indorser;
defense pro tanto, 2. No value is
whether the received by the
failure is an accommodation party
asceratained and
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
by virtue last
of a indorsement is
judicial demand, an
or indorsement
b.2. the principal in blank.
debtor is insolvent.
2.If payable to
NEGOTIATION order, it negotiated
by the indorsement of
An instrument is
negotiated when: the holder
completed by delivery.
a. It is transferred
from one person to A negotiable
another instrument payable
to the
order of a
b. That the transfer
specified person,
must be in a
or to
manner as to
him or his
constitute the
order, may be
transferee a holder
negotiated by
the payee
by indorsement
Modes of Negotiation: followed by
1.If payable to delivery of
bearer, it is the instrument
negotiated by delivery. to the
indorsee.
Negotiation of Subsequent
negotiable negotiation may
instrument may be made
be effected in this manner
by the delivery if the
alone of holder who indorses
the instrument to acquired
the the instrument
transferee in under a special
those negotiable indorsement.
instruments which
are:
-originally
The payee of
payable to
the
bearer, negotiable
or instrument acquires
no interest
-originally with respect
payable thereto
to order until its delivery
to him.
instruments (Development Bank of
where the
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
negotiate 1. Forgery; or
does not 2. Lack of good title
make an on the part of
indorsement the indorser; or
restrictive. (Sec. 3. Lack of capacity to
36) indorse on
the part of the
EFFECT of prior parties; or
Restrictive indorsement: 4. The fact that at
the time of the
Confers upon the endorsement, the
indorsee the right- instrument was
valueless or nit
a. Receive payment of valid, and he knew of
the instrument; the fact.
b. Bring any action A Qualified
thereon that the indorsement
indorser could bring; does not
impair the
c. To transfer his negotiable character
rights as such indorsee, of the
when the form of instrument.
the instrument
authorizes him to As mentioned earlier,
do so. Negotiation is
F. QUALIFIED- Constitutes the transfer
the indorser a of a negotiable
mere assignor of instrument from one
the title to the person to another as
instrument. ( Sec38) to constitute
the transferee the
It is made holder thereof.
by adding
to the To be
indorsers signature valid, negotiation
words must
like sans involve the
recourse, without entire instrument.
recourse,
indorser not Effects of indorsing
holder, at an instrument originally
the indorsers payable to bearer:
own risk,
other - It may further
terms of be negotiated by
similar import. delivery
- The person
instrument is indorsing is liable
dishonored by as indorser
non- to such persons
acceptance or as to make
non- payment title through his
due to: indorsement (Sec. 40)
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Notes on Section
40 Every holder is
Section 40 applies deemed prima
only to facie to be a
instruments originally holder in
payable to due course; but
bearer when it is shown
It cannot apply that the title of
where the any person
instrument is payable who has negotiated
to bearer the instrument was
because the only defective, the burden
or last indorsement is on the
is in blank holder to prove
that he or some
A holder may person under whom
strike out any he claims
indorsement which is acquired the title as
not necessary to holder in
his title. (Sec. due course. But
48) the last-mentioned
Effects: rule does not apply in
- An indorser whose favor of a
indorsement is party who became
struck out is bound on the
discharged instrument prior to
- All indorsers the acquisition of
subsequent to such such defective title.
indorser who has (Sec. 59)
been discharged are *Note: Holder in
likewise relieved due Course (Secs.
52,57&59)
Effects of a transfer
without endorsement:
Personal and
- The transferee acquires Real Defenses
such title as
the transferor had
- The transferee acquires ( 2000 &
the right to 2009 BEQ)
have the indorsement of
the transferor Requisites for a
- Negotiation takes Holder in Due Course
effect as of the (HDC):
time the indorsement is a. Receives the
actually made instrument complete
(Sec. 49) and regular on
its face
b. Became a holder
WHO IS A before it
HOLDER IN DUE was overdue and
had no notice
COURSE?
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Notes
- Holds the instrument
on Section free from any defect
52 Every of title of
holder is prior parties
- Free from defenses
presumed to
available to prior
be a HDC parties among
(Sec. 59)
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
2. A drawer is
secondarily liable 4. IRREGULAR INDORSER
Effects of - a
drawing the person not otherwise a
instrument, the party to an
drawer: a. instrument places
Admits the his signature in
existence of the blank before delivery
payee, is liable
as an indorser
b. The capacity of in the following
such payee to manner:
indorse a. If payable to
c. Engages that on order of a third
due presentment, person liable to
the instrument will the payee and to
be accepted or all subsequent
paid or both parties
according to b. If payable to
its tenor. order of the maker
or drawer
If the instrument is liable to all
dishonored, parties subsequent to
the maker or
and the
drawer
necessary proceedings
c. If payable to
on dishonor duly
bearer liable
taken
to all parties
a. The drawer will
subsequent to the
pay the amount
maker or drawer
thereof to the holder
d. If signs for
an accommodation
b. Will pay to any
party liable
subsequent indorser
to all parties
who may be
subsequent to the
compelled to pay it.
payee (Sec. 64)
(Sec. 61
*Note: Irregular Indorser
NIL)
v. General
Indorser (2005
Notes
BEQ) Irregular
on
Indorser, is not a
party to the
Section
instrument but he
61
places his signature in
blank before
A drawer may
delivery. He is
insert an express
not a party
stipulation to
but he becomes
negative or limit
one because of
his liability
his signature in
the instrument. Because
3. An acceptor is
primarily liable his signature
he is considered
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
an indorser and
he is liable to Limitations of
the parties in warranties:
the instrument. While, - If by
a General delivery
Indorser warrants extends
that the instrument is only
genuine, that to
he has a good immediate
title to it, that transferee
all prior parties - Warranty of
had capacity to capacity to contract
contract; that the does not apply to
instrument at the
time of the persons
indorsement is valid negotiating
and subsisting; and public or
that on due corporate
presentment, the securities
instrument will be (Sec. 65
accepted or paid or NIL)
both accepted
and paid according to Notes
its tenor, on
and that if it is
dishonored, he Section
will pay if the 65
necessary
proceedings for dishonor A qualified indorser
are made. is one who
indorses without
5. Warranties where recourse or sans
negotiating by recourse
delivery or qualified Recourse - resort
endorsement: to a person
secondarily liable
a. The instrument is
after default of
genuine and in
person primarily
all respect what it
liable
purports to
A qualified indorser
be
cannot raise
b. The indorser has
the defense of
good title to it
a) forgery b)
c. All prior parties
defect of his
had the capacity to
title or that it is
contract
void c) the
d. Indorser has no
incapacity of the
knowledge of any
maker, drawer or
fact that would
previous
impair the validity
indorsers.
or the value
A qualified
of the
Indorsement makes
instrument.
the indorser mere
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
assignor of Notes
title of instrument, on
relieves him of
general obligation to Section
pay if 66
instrument is
dishonored, but he is The indorser
still liable under Section
for the warranties 66 warrants the
arising from solvency of a
instrument only up to prior party
warranties of The indorser
general indorser warrants that the
The warranty is instrument is valid
to the capacity and subsisting
of prior parties regardless of whether
at the time he is ignorant
the instrument was of that fact or
negotiated. not.
Subsequent Warranties extend
a. The instrument is in favor of a)
genuine and in a HDC b)
all respect what it persons who derive
purports to their title from
be HDC c) immediate
b. The he has good transferees even if
title to it not HDC
c. All prior parties The indorser
had the capacity to does not warrant
contract the genuineness of
d. That the the drawers signature
instrument at
the General indorser is
time of only secondarily
his indorsement liable
was valid and
subsisting (Sec. 66)
PRESENTMENT FOR
PAYMENT
In addition:
- Engages that the General rule:
instrument will be Presentment for
accepted or paid payment is
or both according not necessary
to its tenor to charge
on due presentment persons
- Engages to pay primarily liable
the amount thereof on the
if it be instrument.
dishonored and the Presentment for
necessary proceedings payment is
on dishonor are necessary to
taken
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Section
70 Acts needed to
charge persons
Presentation for secondarily liable:
payment
production of a a) Presentment for
BOE to the drawee payment/acceptance
for his b) Dishonor by non-
acceptance, or to a payment/non-acceptance
drawee or
acceptor for a. By the holder or
payment. Also an authorized
presentment of a person
PN to the party b. At a reasonable
liable for payment hour on a business
of the same. day
c. At a proper
place
Consists of d. To the person
a) a personal primarily liable or if
demand for payment absent to
at a proper any person found
place b) at the place
the bill or note where presentment is
must be ready made (sec. 72
to be NIL)
exhibited if required
and surrendered
Presentment for
upon payment. payment is made
to the maker,
Parties primarily or acceptor. Not
liable persons to the person
by the terms secondarily liable.
of the instrument
are absolutely required
to pay the
same.
E.g maker and
acceptors. They
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
2. Alteration by a
STRANGER (
MATERIAL SPOLIATION )
If subsequently
ALTERATION negotiated to a
non-Holder in Due
General rule: CourseA material
When alteration avoids
materially altered, the instrument as
without the against any prior party
consent of who has not
all parties assented to the
liable, the
alteration.
instrument is
avoided except
as against: If subsequently
a. The party who has negotiated to a
made the alteration Holder in Due Course
He may enforce
b. The party who
payment thereof
authorized or assented
according to its
to the
original tenor
alteration.
regardless of whether
c. Subsequent indorsers the alteration
Exception: was innocent or
- If in the fraudulent.
hands of a
HDC, may be CHANGES that
enforced according constitute MATERIAL
to its ALTERATIONS
original tenor 1.The date;
2.The sum payable,
MATERIAL ALTERATION
either for principal or
interest;
- Any change
3.The time or place of
in the instrument
which affects or payment;
changes the liability 4.The number or
of the parties the relations of
in any way. the parties;
Whether the alteration 5.The medium or
made is currency in which
favorable or payment is to
unfavorable to the be made;
party making the
alteration, no 6.Or which adds a
distinction as to place of payment
the effect is where no
made. The intent of place of payment is
the law is to specified; or
preserve the
integrity of the
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
The signification by
the drawee of
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Notes d. Qualified as to
on time
e. The acceptance
Section of some or
137 more drawees but
NOT ALL.
Drawee becomes
primarily liable as - The holder of
an acceptor. the bill has the
Mere retention is right to require
equivalent to GENERAL ACCEPTANCE
acceptance thus he
may REFUSE to
B. General take qualified
Acceptance: acceptance and if
An acceptance he DOES NOT obtain
to pay at a an unqualified
particular place is acceptance he
a general may treat the bill as
acceptance unless it DISHONORED
is expressly BY NON-ACCEPTANCE
states that the accordingly the
bill is to be holder must give notice
paid there only and of dishonor.
not elsewhere.
- Effect of taking
C. Qualified qualified acceptance:
Acceptance if
in express terms
varies the - Where a qualified
effect of the bill as acceptance is taken
drawn. THE DRAWER
and INDORSERS are
Kinds of discharged from liability
Qualified on the bill
Acceptance: unless they have expressly
a. Conditional one or impliedly
which makes payment authorized the holder
by the acceptor to take qualified
dependent on acceptance or
the fulfillment of a subsequently assents
condition therein thereto.
stated;
b. Partial an * When
acceptance to pay the drawer
part only of the or indorser
amount for which receives notice
the bill is of qualified
drawn; acceptance
c. Local an he must
acceptance to pay within
only at a particular a
place; REASONABLE
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
PRESENTMENT
For Presentment for
Acceptance acceptance must be
(Sec. made by or on
143) behalf of the holder
For at a
Payment reasonable hour, on a
( Sec. business day
70) and before the
( 2000 & bill is overdue, to
2003 BEQ) the drawee or
some person
PURPOSE: To get authorized to accept
acceptance of the or refuse
drawer for purpose acceptance on his
of making behalf; and
him primarily liable
as an (a.)
acceptor. Presentment is Where a bill is
also prerequisite addressed to two or
to the accrual more drawees
of secondary who are not partners,
liability against presentment
the drawer and must be made
the indorsers. to them all, unless
one has authority
to accept
On what days
or refuse
presentment must
acceptance for all,
be made:
in which case
presentment may be
A
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
that it is
not to A. CORPORATION,
be presented at DEFINED
the bank, An artificial being
but will created by
be redeemed operation of law
by the maker having the right of
himself succession, and the
when the loan
powers, attributes
falls due and
and properties
which understanding
expressly authorized
is
evidenced by by law and incident
writing the word to its
memorandum, existence. (Sec.
memo or 2). It has a
mem on separate and distinct
the check. personality from
d. Certified Check- its incorporators.
An agreement whereby (2000 Bar
the bank against Examination)
whom a
check is drawn Attributes of a
undertakes to pay it Corporation
at any future 1. It is an artificial
time when being.
presented for 2. It is created
payment. (Sec. 187) by operation of
e. Travelers Check- It law.
is one upon
3. It enjoys the
the holders
right of succession.
signature must appear
4. It has the powers,
twice; one to
be affixed attributes and
by him at the properties through
time it is issued the SEC. (Tayag
and the second, vs. Benguet
for counter- Consolidated, Inc.,
signature, to be 26 SCRA 242)
affixed by him in
the presence of
the payee before 2. Theory of
it is paid, corporate enterprise
otherwise it is or economic unit
incomplete. the corporation
is not merely
an artificial being,
but more of
CORPORATION an aggregation of
persons doing
LAW business, or an
(Batas Pambansa underlying business
Bilang 68)
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
in corporation is 3. as a shield to
an entity with a confuse the
juridical legitimate issue;
personality separate 4. where the corporation
and distinct from is the mere
its members or alter ego or business
stockholders may be conduit of a
disregarded and the person; or
corporation will be 5. where the corporation is
considered as a so organized
mere associations of
and controlled and
persons, such that
its affairs are
liability will attach
directly to so conducted as
the officers and to make it
the stockholders merely an
(Umali vs. Court instrumentality, agency,
of Appeals, 189 conduit or
SCRA 529, 542 [1990]). adjunct of another
It is corporation (Umali
an equitable doctrine vs. Court
developed to of Appeals, 189
address situations SCRA 529, 542 [1990]).
where the separate
corporate personality of
a corporation Test in Determining
is abused or Whether to
used for wrongful Pierce the Veil
purposes. of Corporate
Personality
Grounds for 1. Control, not mere
Application of majority or
the Doctrine complete stock
(2006 Bar control, but
Examination) complete domination,
The doctrine of not only of the
piercing the finances, but of
veil of policy and business
corporate entity practice in respect
will apply to the
when the
transaction attacked
corporations separate
so that the
juridical
corporate entity
personality is
used: as to this
1. to defeat public transaction had at
convenience; the time no separate
2. to justify wrong, mind, will or
protect fraud, existence of
or defend its own;
crime; 2. Such control must
have been
used by
GREEN NOTES IN COMMERCIAL
LAW
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i. Redeemable regardless
shares may of the
be issued existence
only of
when
expressly unrestricted
provided retained
for in
the articles earnings
of
incorporation; (Sec. 8), and
ii. Terms and provided further
conditions that the
affecting corporation
said shares has, after
must such redemption,
be sufficient assets
stated both in its books
in the to absorb
articles corporate debts
of and
incorporation liabilities.
and in
the TREASURY SHARES
certificates are shares
of stock that have been
earlier issued
representing as fully paid
such shares; and have
thereafter been
iii. Redeemable acquired by the
shares may corporation by
be purchase,
deprived donation,
of voting redemption or
rights through some
in lawful means
the articles (Sec. 9). When
of treasury shares
incorporation, are sold below
unless its par or
otherwise issued value,
there can be
provided in no watering
the of stock
Code. because watering
iv. Redeemable of stock
shares contemplates an
may original issuance of
be shares. PAR
redeemed, VALUE SHARES
GREEN NOTES IN COMMERCIAL
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FORMS: MANAGEMENT
1. Cash CONTRACT: is
2. Property an agreement
3. Stock whereby a
corporation
REQUISITES: undertakes to
1. Existence of manage or
unrestricted retained operate all or
earnings out of substantially all
which the dividends of the
may be declared business of
and paid (2005 another corporation,
Bar Examination) whether such
2. A corporate contracts are
resolution of the called service
board of directors contracts,
GREEN NOTES IN COMMERCIAL
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by a shareholder
PRE-EMPTIVE RIGHT in his behalf
vis a - and in behalf
vis RIGHT likewise of other
OF FIRST stockholders
REFUSAL (Philippine similarly against
Corporate Law, Cesar any person or
Villanueva, against the
2001 ed.) directors, officers
and/or controlling
PRE-EMPTIVE RIGHT OF shareholders of the
RIGHT FIRST REFUSAL corporation.
Requisites:
May be Arises onlyi. An existing cause
exercised virtue of action in
even when of favor of the
there contractual corporation
is no stipulations ii. The stockholder/member
express is must first
make a demand
provision also granted
upon the corporation or
of law under
the management
the
to sue unless
provisions such a demand
Close would be
futile
Corporation iii. The stockholder/member
Pertains Exercisable must be
to against such at the time of
unsubscribed another the objectionable
portion of stockholder acts or
the the transactions unless
authorized corporation the transactions are
capital stock. his continuously injurious
A shares of
right that stock iv. The action must
may be be brought
claimed in the name of
against the the corporation
corporation
The number
of shares of
4. REMEDIAL RIGHTS the stockholder is
a. Individual suit a immaterial since
suit instituted he is not suing
by a shareholder in his own
for his own behalf behalf
against the
corporation; Note: The
b. Representative suit mere trustee of
a suit filed shares
GREEN NOTES IN COMMERCIAL
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5. LIABILITIES OF
STOCKHOLDERS However, in the
a. Liability to case of non-stock
the corporations, the by-laws
corporation for may provide
unpaid that meetings may
subscription be held at any
b. Liability to the place even outside
corporation for interest the principal
on unpaid place of the
subscription corporation. (Sec. 93)
c. Liability to
creditors of the
corporation on the I. BOARD
unpaid subscription OF
d. Liability for watered DIRECTORS /
stock TRUSTEES
e. Liability for
dividends unlawfully
paid EXCEPTIONS:
f. Liability for failure 1. In case of an
to create Executive Committee
corporation duly authorized in
the by-laws;
6. STOCKHOLDERS OR 2. In case of a
MEMBERS MEETING contracted manager
which may be an
WHEN: individual, a
1. REGULAR - partnership, or another
held on the date corporation. Note:
fixed in the by-laws In case the
or if not contracted manager
fixed on any date in is another
April; and corporation, the special
2. SPECIAL - held at
any time deemed rule in Sec.
necessary or 44 applies.
as so provided in
the by-laws. 3. In case of close
WHERE: corporations,
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
the stockholders OR
may manage the DIRECTORS/TRUSTEES
business of the
corporation instead 1. Limitations imposed
by a board of by the Constitution,
directors, if statutes, articles
the articles of of incorporation
incorporation so provide. or by-laws.
2. Cannot perform
The power to constituent or those
purchase real property involving
is vested in fundamental changes in
the board the corporation
of directors or requiring the approval
trustees. While a of stockholders
or members.
corporation may
appoint agents 3. Cannot exercise
to negotiate for powers not
the purchase of possessed by the
real property needed corporation. (The
by the Corporation Code
corporation, the final of the
say will have Philippines Annotated,
to be with the Hector de
board, whose Leon, 2002 ed.)
approval will finalize
the transaction.
A corporation NATURE OF
can only exercise POWERS OF
its powers and BOARD OF
transact its business DIRECTORS/TRUSTEES
through its (The Corporation
board of directors Code of the
and through its Philippines Annotated,
officers and agents Hector de
when Leon, 2002 ed.)
authorized by a
board resolution or a.Under the Theory of
by its by-laws. Original Power,
(Spouses Constantine the powers of
Firme vs. the board
Bukal Enterprises and of directors or
Development Corporation, trustees are
G.R. No. ORIGINAL and
146608, October, UNDELEGATED.
23, 2003) The stockholders
or members
do not confer,
LIMITATIONS ON
nor can they
POWERS
revoke those
OF BOARD
powers.
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
stockholders / or trustees
members. if
so stated
remaining in
constitute notice
of the
may be meeting
filled by a. There is
the MAJORITY a provision
vote of in the
the remaining by
directors. laws
If no quorum authorizing payment
filled of compensation;
by the or
stockholders in b. By a vote
a regular of the
or special Stockholders
meeting representing at
called for least majority
that purpose.
of the
outstanding capital
3. Proposed amendment
stock
of Articles
at a regular
of Incorporation
or special
resulting in increase
meeting.
in number of
directors /
LIMIT: In either
trustees
case, the total yearly
Vacancy
compensation of
shall
the directors
be
shall not exceed
filled
10% of the net
by
income before
the
income tax of
stockholders
the corporation during
in a
the preceding
regular
year.
or
special
meeting 7. DUTY OF LOYALTY
called To Act according
for that to the corporations
purpose best interest
Or in
the same DOCTRINE OF
meeting DISLOYALTY OF
CORPORATE A
authorizing OPPORTUNITY DIRECTOR
increase
of
directors
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Corporation Code
of the
Philippines
Annotated, Hector
de Leon,
2002 ed.)
Must be provided
for in the
by-laws and
composed of not
less than 3
members of the
board appointed otherwise provided in
by the board. the by-laws;
and
May act by a 2. SPECIAL - held at
majority vote of any time upon
all of its the call of the
members president.
SHARES ISSUANCE OF
a. It is valid and NEW
binding as between CERTIFICATE OF STOCK
the transferor IN LIEU OF
and the transferee LOST, STOLEN OR
b. It is invalid DESTROYED ONES
as to the (Sec. 73)
corporation except 1. Filing with the
when notice is corporation an affidavit
given to the in triplicate
corporation for by the registered
purposes of owner setting forth
registration the circumstances
c. It is invalid as to how
as against the certificate was
corporate creditors lost, stolen or
and the transferor is destroyed, the number
still liable to of shares,
the corporation serial number of
d. It is invalid the certificate and
as to the the name of
attaching or the corporation that
executing creditors of issued the same.
the transferor,
as well as 2. Publication of notice
subsequent purchasers of loss by
in good faith the corporation in a
without notice newspaper of
of the transfer. general circulation
in the place
of the
c. ISSUANCE principal office,
OF once a week for 3
CERTIFICATE consecutive weeks.
OF
STOCK
No certificate of
stock shall be issued
until the full
amount of the
subscription is paid.
Basis:
Doctrine of
Individuality of
Subscription
D. PROCEDURE
FOR
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
cause the
extinction or
diminution of the
rights and liabilities
of such entity
nor those
of its owners
and creditors alike
(Sec. 145).
The word trustee
as sued in the
corporation statute
must be understood in
its general
concept which
could
Winding up Contemplates
CLOSE a
process continuance
CORPORATIONof
so corporate life
GREEN NOTES IN COMMERCIAL that
may
assets in
be
an
to
effort
Business of Business of
the the
corporation is corporation may
managed be
by managed by
the the
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
CORPORATIONS
A corporation RULES ON
organized for an CONVERSION (SEC
eleemosynary purpose, Opinion)
and no part of 1. Stock to non-
whose income is,
stock corporation
during its existence,
Conversion may be
distributable as
made by mere
dividends to its
amendment of the
members, trustees,
articles of
or officers, subject
incorporation. 2. Non-
to the
stock to stock
provisions of the
corporation
Corporation Code on
dissolution. (Sec. The corporation must
87) first be
Any profit which dissolved; mere
it may obtain amendment of the
as an incident articles of
to its incorporation would
operations shall, not suffice because
whenever necessary the conversion
or proper, be would change the
used for the corporate nature
furtherance of the from non-profit to
purpose or monetary gain.
purposes for which The conversion without
it was dissolving it
organized. first would be
tantamount to
distribution of its
Eleemosynary
assets or income
purposes: charitable,
to its members
religious, educational,
inasmuch as after
professional, cultural,
its conversion,
recreational, fraternal,
the asset of
literary, scientific,
the non-stock
social, civic service,
corporation would
or similar
now be treated
purposes, like trade,
as payment to
industry,
the subscriptions
agricultural.
of the members
(Sec. 88)
who will now become
They are governed
stockholders
by the same
of the corporation.
rules established for
stock corporations,
whenever pertinent, RIGHTS OF
subject, MEMBERS
however, to a
number of special 1. To be entitled
features. to 1 vote unless
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
A change
of interest in
any part of a
thing insured
unaccompanied by a
corresponding
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
-A prior SC:
conviction for Under the law,
adultery/concubinage the beneficiary
is not designated in a
required, it life insurance contract
can be proven cannot be
by changed without
preponderance his or her consent
of evidence in because of
the same the beneficiarys
action vested interest in
nullifying the the policy. In
designation. Note this regard, it is
the cases worth nothing
of Insular that the
Life vs. Ebrado, beneficiary designation
80 SCRA indorsement which
181, where forms part of the
a policy in the name
common law of Rodolfo
wife of the Dimayuga states
insured who is that the designation
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
insurer. It must be
is sufficient that disclosed.
his non-disclosure
misled the insurer in
HOW IS THE
forming his
MATERIALITY OF
estimate of the
THE CONCEALMENT
risks of the
OR REPRESENTATION
proposed insurance
DETERMINED?
policy or in
making inquiries. Determined not
by the event,
but solely by
WHO MUST PROVE
the probable and
KNOWLEDGE
reasonable influence
OF THE FACT
of the facts
CONCEALED?
upon the party
The party claiming to whom the
existence of communication is
concealment must prove due, in forming
that there his estimate of
was knowledge on the disadvantages
the part of of the proposed
the party charged contract or in
with concealment. making his
inquiries. (Sec. 31)
AS OF WHAT MUST THERE
TIME MUST THE BE A
PARTY CHARGED CAUSAL
WITH CONCEALMENT CONNECTION
HAVE KNOWLEDGE BETWEEN THE FACT
OF THE CONCERNED
FACT CONCEALED AND THE CAUSE
OF THE LOSS?
- Generally, at
the time
of the Not necessary. It
effectivity of is sufficient that
the policy. the non--
Note that even if revelation has misled
a party the insurer
did not know in forming its
of the estimate of
existence at disadvantage of
the crime fixing the premium.
of application
but before WHAT FACTS MUST
its effectivity,
BE
there is
COMMUNICATED?
concealment.
after effectivity but (a) Such fact within
before reinstatement his
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
knowledge information on
as concealment a matter
requires proving or
knowledge of tending to
the fact prove falsity
concealed by of a
the party warranty entitles
charged with the
concealment. insurer to rescind.
(b) Fact/s material (Sec. 29)
to the
contract
1996, 1997, and
it must be
2001 BAR EXAMS
of such nature
that had Sun Life Assurance
the insurer Co. of Canada
known of it, vs. CA, June 22,
it would 1995
not have
accepted the Robert Bacani was
risk or issued life insurance
demanded a non-medical policy
higher premium. for P100,000.00
(c) That the other with his mother
party as beneficiary. In
had no means his application, he
of concealed his
ascertaining such confinement at the
fact/s. Lung Center of
(d) That the party the Philippines for
with a certain illness.
duty to He died of a
communicate plane crash.
makes no The insurance
warranty (Sec. company refused
28) as to pay for breach
the existence of the
of a insurance contract.RTC
warranty make and CA
the granted the claim
requirement to of the
disclose beneficiary because
superfluous but the concealed facts
an were not material
intentional or irrelevant to
fraudulent the cause of
omission on death.
the part of
the one insured SC:
to
communicate
The SC
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
WHEN MAY
REPRESENTATION BE IS A
MADE REPRESENTATION PART
OF THE
Since it is CONTRACT
an inducement
to entering a No, it cannot
contract it qualify as an express
must ordinarily be provision in a
made at the same contract (it
time as or is a collateral
before the inducement to the
insurance of the contract but it
policy (Sec. 37). may qualify an
Note that it can implied warranty.
also be made (Sec. 40)
after the issuance CAN A
of the policy REPRESENTATION BE
when the purpose WITHDRAWN OR
thereof is to ALTERED
induce the insurer
to modify an Yes, as long as
existing insurance the insurance has
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
IS PAYMENT OF
A PREMIUM
PAYMENT FOR
THE
COVER NOTE
NECESSARY TO BE
PROTECTED AGAINST
RISK INSURED
AGAINST?
Cover note held
to be binding
despite the absence
of a
premium payment
for its issuance.
No separate
premiums are
intended or required
to be paid
on a cover
note because they
do not contain
particulars of the
property insured
that would serve
as the basis
for the
computation of
premiums such
being the case no
premium can be
fixed. The cover
notes should not
be treated as a
separate policy
but should
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
of all is agreed
insured, if not, it upon, but
is only the is
interest of the left to
one be
getting the ascertained
policy that is in case of
insured; loss (Sec. 60).
What is
(4) When the description mentioned, as
of the insured the amount
in the policy is not the
is so general value of
that it may the property
comprehend any person but merely
or any class the maximum
of persons, limit of the
only he who can insurers liability.
show that it was In case
intended to include of loss, the
him can claim insurer only
the benefit pays the
of the policy actual cash
(Sec. value at
the time of
(6) The mere transfer loss.
of a thing
insured does not Valued Policy
transfer the policy -
but suspends expresses on
it until the its face that
same person the thing
becomes the insured shall
owner of both be valued
the policy at a
and the thing specified sum
insured (Sec. 58). (Sec. 61).
Note the The valuation
exceptions to of the
this rule as property
found in Sec. insured
20-24 and 57. is
conclusive
KINDS OF between the
INSURANCE POLICIES: parties. In
the absence
Open Policy of fraud or
- value mistake, such
of the value will
thing insured be paid in
is not
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
CANCELLATION OF
THE POLICY FORM OF NOTICE
OF CANCELLATION
If policy other
than life shall
be cancelled by It must be in
the insurer except writing, mailed
upon prior or delivered
notice thereof to the name
to the insured at the
insured. No notice address shown in
the policy
of cancellation
which shall state:
shall be
effective if not (1) The grounds relied
based on the upon as
occurrence, after per Section
effective date of 64, and;
one or more (2) That upon written
grounds: (Section request of the
64) named insured, the
insurer will furnish
(1) Non payment of
the facts on which
premium; cancellation is
(2) Conviction of a based (Sec. 65).
crime arising out
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
W A R R A is a
N T I E warranty that
S such act
or
It is a omission shall
statement or promise take place
stated in (Section
the policy or 72);
incorporated therein
by reference,
whereby the insured (3) Express
expressly a statement
or impliedly (Section in a policy
67) of a
(1) Affirmative matter
those relating to
that relate the person
to matters or thing
that exist insured or
at or before to the risk
the as a fact
issuance of (Section 71)
the and where
policy; the
assertion or
(2) Promissory promise is
those clearly set
where the forth in
insured the policy
promises or or incorporated
undertakes therein
that certain by reference.
matters They can
shall exist be affirmative
or will be or promissory
done or warranties;
will be omitted
after the An express
policy takes warranty made
effect. at or
It is a before the
statement in execution
the policy, of the policy
which imparts should
that it be contained
is intended (a) in the
to do or policy itself
not to do (b) in
a thing another
which instrument
materially affects signed by
the risk,
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Notwithstanding any
agreement to the
contrary, no policy
WARRANTY REPRESENTATION
or contract
of insurance issued
Part of the Merely a by an
contract collateral insurance
inducement company is valid
thereto and binding
Expressly set May be oral unless and until
forth or the premium is
in the written in paid except
policy another in:
or statement (1) In case of
incorporated life or
therein industrial life
by reference (life
insurance policy
Strictly and Must be where
substantially true the
literally premium is
P R E Mperformed I U M
payable monthly
or oftener)
Presumed Must be whenever
material shown to be the grace
so period applies
Breach of Misrepresentation (Sec. 77);
warranty is is a (2) When the
a ground insurer makes
breach of the to a written
contract rescind the
itself contract acknowledgement
of the
WARRANTY VS. receipt of
REPRESENTATIONS premium, such
is conclusive
The agreed evidence of the
price for payment of the
assuming and carrying premium to make
the risk. it binding
WHEN IS THE notwithstanding any
INSURER ENTITLED stipulation therein
TO A PREMIUM? that it shall not
be binding until
The insurer is the premium is
entitled to paid (Sec. 78) HENCE,
the payment of a the effect
premium as of an
soon as the thing
acknowledgement in a
insured is exposed
policy or
to the peril
contract of
insured against.
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
of
WHEN IS THE less
INSURED ENTITLED than
TO A RETURN a year
OF THE PREMIUMS and
PAID? 2000 a rate
BAR EXAM (IX has been
a) agreed
to if
The
the
insured
policy
is is
entitled to a
return surrendered;
when:
(1) To the whole Example: If
premium, when the
no part of the policy is
interest in the in
thing insured is force
exposed to any for a
of the perils month
insured against the insurer
(Sec. 79 A); retains
(2) Where the insurance 20%
is made for a of the
definite period premium)
of time and has
the insured been
surrenders his agreed
policy before upon;
the expiration (c) the policy
of the period, is
here the insured a life
only recovers a insurance
portion of the policy
policy premiums it
corresponding is
with the indivisible
unexpired time but he
but it has a
does not cash
apply if: surrender
(a) the value;
policy is (3) When the contract is
not so definite; voidable on
account of fraud
(b) a short or
period misrepresentation of
rate the
(insurance insurer or the agent
is for (Sec. 81);
a period
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
creditors of BE NECESSARY IN
the insured. A COURT OF
JUSTICE WHAT IS
NOTICE AND PROOF SUFFICIENT is
OF LOSS the BEST EVIDENCE
Notice of loss which he has in
must be given his power at
without unnecessary that time (Sec. 89).
delay by
the insured or WHEN ARE
some person entitled DEFECTS IN THE
to the benefit NOTICE OR PROOF
of the
insurance. IF NOT LOSS DEEMED
THEN, the insurer is WAIVED BY THE
exonerated (Sec. INSURER
88).
When the insurer
WITHOUT UNNECESSARY fails to
DELAY is specify to
within a the insured
reasonable time, any defect
depending on which the insured
circumstances of a can remedy
peculiar case, without
although courts delay.
have 2. If the insurer
construed the omits
requirement liberally in to make
favor of the an objection
insured. promptly and
specifically on
PROOF OF LOSS that ground.
despite
If the policy delay, the insurer
requires Preliminary does not
Proof of Loss object (Sec. 91).
(evidence given
the insurer of WHAT HAPPENS AFTER
the occurrence of PAYMENT BY
the loss, its THE INSURER
particulars, and data SUBSEQUENT TO
necessary to enable GIVING OF
it to NOTICE OF LOSS
determine liability
and the amount
thereof) IT IS In property
NOT NECESSARY that insurance, after
the insured has
the insured give
received payment
such proof AS
from the insurer
MAY OR WOULD
of the loss covered
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
(Geagonia v.
Country Bankers
Insurance, 2/6/95).
As there is
no indication of a
contractual
prohibition on double
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
or other is a valued
insurance, all policy, the insured
insurance contracts must give credit
over the building as against the
are deemed valid valuation for any
and enforceable. sum received by
The law him under any
prohibits double policy without regard
or over-recovery, to the actual
not double value of
insurance. Since the subject matter
eastern insured insured.
the property up 3. Where the policy
50% the total under which the
coverage, it is insured claims
liable for only 50% is an unvalued
of the total actual policy, he must
loss. Eastern give credit, as
Insurance Corp, is against the full
liable to insurable value,
the extent of for any sum received
its coverage but by him under
may recover one the policy.
half of the total
indemnity from the 4. Where the insured
co-insurers in the receives any sum in
proportion of 60% excess of
(Southern Insurance)- the valuation in
40 % ( case of a valued
Northern Insurance) policy or
the insurable value
EFFECTS OF in case of
OVER-INSURANCE an unvalued policy,
he must hold
BY DOUBLE
such sum in trust
INSURANCE
for the insurers,
1. Insured, unless according to their
the policy right of
otherwise provide, contribution among
may claim payment them;
from the insurers 5. In relation
in such order paragraph (4)
as he may Each insurer is
select up to the bound, as between
amount for which
himself and the
the insurers
other
are severally liable
or damage
under their
(Also known
respective contracts.
as
2. Where the policy
CONTRIBUTION
under which the
CLAUSE).
insured claims
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
A: Yes, because
A: When the
the crew
vessel is not
members died while
seaworthy, it is
performing their
an exception to
assigned duties,
the hypothecary
aggravated by
principle in maritime
the failure of
commerce.
the ship owner
To limit its liability
to ensure that
to the amount
the vessel is
of the
seaworthy.
insurance proceeds,
Workmens compensation
the carrier has
has been
the burden of
classified by
proving that the
jurisprudence as an
unseaworthiness of
exception to the
its vessel was
hypothecary nature
not due to its
of maritime
fault or negligence.
commerce, [Abueg
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
A causal The
EFFECT OF connection concealment of
CONCEALMENT between the any of the
fact concealed matters
It exonerates and cause stated in
the insurer from a of loss is section 110
loss resulting not necessary merely exonerates
from
for the the insurer
the risks concealed
insurer to from loss, if
as related to:
rescind; the results
(a) the national
from the fact
character of the
insured; concealed;
(b) the liability of
the thing insured REPRESENTATION IN
to capture MARINE INSURANCE:
and detention;
(c) the liability to
If the
seizure from breach
representation
of laws of
is intentionally
foreign laws of trade;
false in
any material
(d) the want of
respect, or,
necessary documents ;
in respect
(e) the use of of any fact
false/simulated on which
documents the character
and nature
of the risk
ORDINARY depends, the
CONCEALMENT vs. insurer may
MARINE INSURANCE rescind
(Section 111).
ORDINARY MARINE But the
INSURANCE INSURANCE eventual falsity
Opinion or Belief or of a
belief of a expectation representation
3RD person 3RD person as to an
or own in reference expectation does
judgment of to a not in
the insured material the absence
is not is material of fraud
material and and has avoid the
need not be be contract (Sec.
communicated; 112).
communicated
(Sec. 35)
WHAT ARE THE
IMPLIED WARRANTIES
IN MARINE
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
THE DOCTRINE OF
a) Was there
LIMITED LIABILITY
constructive total
[when not
loss to
applicable] The
entitle the
shipowner to doctrine of limited
recover liability under
from the Article 587
insurance of the Code of
company? Explain. Commerce is not
applicable to owner
A: There was equally
was constructive total negligent. It cannot
loss. When the escape liability
vessel sank, it by virtue
was likely that it of the limited
would be totally liability rule. (Central
lost because of Shipping
the improbability Company, Inc. v.
of recovery. Insurance Company
(Arnolds Law of of North America,
Marine Insurance and
Average, 16th ed., Sept. 20, 2004,
Vol. II, pp. 954-- G.R. No. 150751)
955)
Suggested Alternative
Answer: ABANDONMENT is
the act of
the insured by
which, after a
There was no
constructive total loss,
constructive total loss. he desires to
The loss is not the insurer the
more than the relinquishment in
value of the vessel its favor his interest
which was in the thing
insured for insured (Sec. 138).
P40,000,000.00.
The cost of A person insured
refloating is by a contract
P900,000.00 and the of marine
needed insurance may
repairs amount abandon the thing
P2,000,000.00, or a insured, or
total of only any particular portion
P2,900,000.00 which thereof
does not separately valued
by the policy,
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
By giving notice,
oral or written (2) Acts done
notice to in good
the insurer but if faith by those
orally given, who were
a written agents
notice of such of the insured
must be submitted in respect
within seven days to the
from giving thing insured
oral notice (Sec. subsequent to
143). The notice the loss are
must be explicit at the risk
and specify the of the insurer
particular cause and for
of the abandonment his benefit
but need (Sec. 148).
start only enough The agents
to show that of the insured
there is probable become
cause therefore and agents of the
need not be insurer. This
accompanied by proof retroacts to
of interest the date of
or of loss (Sec. the
144). loss when
The requirement abandonment is
as the effectively made;
explicitness of the
notice is due
to the fact that EFFECTIVITY OF
though, if the ABANDONMENT:
insurer pays Abandonment
for a loss as if becomes effective
it were an upon the acceptance
actual total loss, he of the insurer. If
is entitled to it is not
whatever may remain accepted despite
of the thing validity, the insured
insured, or its may nevertheless
proceeds or salvage claim an
as if there actual total loss.
has been a
formal abandonment. LIABILITY FOR
Here the insurer AVERAGES
has opted to
pay for total actual AVERAGE is any
loss notwithstanding extraordinary or
the absence accidental expense
on actual incurred during
abandonment; the voyage for
the preservation
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
of earning or
it; damage due
(d) The cost of to lightning,
insurance is in windstorm, tornado,
each case to be earthquake
added to the value or other
thus estimated allied risks when
(Sec. such
161). risks are
covered by
extensions to
IF THE CARGO
the fire
INSURED AGAINST
insurance policy
PARTIAL LOSS
or under
If it arrives separate
at the port policies
of destination (section 167).
in a Hence,
damaged while it is
condition, the not limited
loss of the to loss
insured is or damage
deemed to due to fire,
be the same coverage
proportion of as to other
the value risks
which the market is not
price at that automatic.
port of the
thing so
2001 BAR EXAM
damaged bears
(N0.XVII)
to the market
Q: JQ, owner
price it would
of the condominium
have brought if
unit, insured
sound (Sec.
the same
162).
against fire with
Meaning if
XYZ
reduction in
Insurance Corp.
value is 1/5,
and made the
then amount
loss payable to
of recovery
his brother. MLQ.
on the
In case of
insurance is
loss by fire of
also 1/5.
the said condominium
unit, who
may recover on
E F I I RN S U R A N C E
the fire insurance
Insurance policy? State
against fire the
includes loss
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Memorandum Circular
No. 2001-001 required Transportation
that defined. a contract
[a]ll public utility of transportation
vehicles whose is one
LTO license whereby a certain
plate, as per latest person or
LTO Official association of persons
Receipt, with an obligate
EVEN middle number themselves to
transport persons,
(0, 2, 4,
things, or news from
6 and 8) shall
one place to
be insured with
another for a
UCPB insurance (PAMI)
fixed price
while those
(3) consignee
with an ODD
Common Carrier
middle number
(1, 3, 5,
Private
7 and 9) shall
Carrier
be insured with
Great As to Availability
Domestic Insurance
(PAIC II) x x x Holds himself Contracts
. out for with
all
people particular
indiscriminately individuals
or
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
A) That the CC
I. VIGILANCE OVER encountered:
THE GOODS a. An act of
RULES governing God;
common carriers there
LIABILITY must have been
over Goods: no delay
General RULE: on the part
Common carriers of the
are responsible for common carrier.
the loss, destruction, Otherwise, if
or deterioration delayed
of the goods, and not for
UNLESS the good reason,
same is due to then it shall
any of the following be held liable
causes only:
notwithstanding
1) Flood, storm, the fact that
earthquake, lightning, all the
or other subsequent
natural disaster requisites were
or calamity; present.
2) Act of the public
enemy in must
war, whether be an unforeseen
international or civil; event or an
event which
3) Act or omission cannot be avoided
of the shipper
or owner of The
the goods; carrier must
4) The character of have exercised
the goods or extraordinary
defects in the diligence before,
packing or in during,
the containers; and after the
5) Order or act of time of the
competent public accident.
authority. (Art. The
1734) proximate
cause must
The CC may not be
absolve itself committed by the
from liability by carrier. If the
proving any of proximate cause
the following of the event
DEFENSES: is caused by
the carrier, then
(2002 Bar exams)
he cannot invoke
the act of
God defense. Under
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
There is already
Negligence is the
an existing Contract
failure to observe of carriage
due diligence with when the carrier
respect to the took possession of
circumstances at the cargo by
hand. placing it on a
lighter or
Contributory Negligence barge manned by
is the failure its authorized
to observe employees. (COMPANIA
due diligence that MARITIMA vs.
an ordinary or INSURANCE
prudent man COMP )
undertakes
in relation to
A bill of lading
the negligence of
that was issued
another.
covering certain
shipment which
When does the
contained a
carriers responsibility
provision that the
GREEN NOTES IN COMMERCIAL
LAW
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Mere carelessness
does not per se
justify an inference
of malice or
bad faith on the
part of the
common carrier ;
Must be GROSS
negligence
Concurring causes
of action arising
from
negligent act of
the common carrier:
1. Culpa
Contractual/breach
of contract
the carrier
is a m
or is
customarily [habitually]
the ca
to whom
the goods
have been
engaged in
transportation
for
the
public.
delivered,
and
the
vessel
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
to
carry
the
goods
is
Requisites for
a
contract
of
transportation
by
land
or
already
in
the
port
where
the
goods
are
held
for
water to be
commercial :
shipment.
habitually engaged in
transportation for the
2. A receipt; and
public; the object
carried is of little
importance
3.
A symbol
of
the
covered
by
it
CARGO- which
includes all FORMALITIES
goods, REQUIRED
wares and WHERE
merchandise aboard a VESSEL
ship which 5. such authority shall
do not from part of take other steps
the ship's in carrying at
stores.
the facts
6. such authority shall
REQUIREMENTS FOR also make
DEFENSE OF PUBLIC statements of what
ENEMY: may be the result
1. act of public of the
enemy in war was proceeding in the
the proximate and logbook and in
only cause of that of the sailing
the loss mate
2. common carrier 7. he shall deliver
exercise due diligence the original records
to prevent, to the captain
minimize loss before,
during, and 8. captain must ratify
after occurrence of the protest
the act of the
public enemy in C. OFFICERS AND CREW
war
FORMALITIES
1. Sailing mate/First mate
REQUIRED WHERE
- second chief of
VESSEL HAS
the vessel who
GONE THROUGH
takes the place
HURRICANE
of the captain
1. Captain must in case of
make a protest absence, sickness,
before competent authority or death and
at the first shall assume
port he touches all of his duties,
2. Such a protest powers, and
must be made responsibilities
within 24 hours
following his arrival
DUTIES:
1. provide himself
3. captain must ratify it
with maps, and
within some
charts with astronomical
period when
tables
he arrives at
necessary for the
his destination
discharge of
4. he must
his duties
immediately proceed
2. keep the Binnacle
with the proof
book
of the facts
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
5. physical incapacity
6. desertion NO LIABILY UNDER
THE FOLLOWING
CAUSES OF
REVOCATION OF CIRCUMSTANCES:
VOYAGE:
1. If before
1. war beginning voyage,
2. blockade captain attempts
3. prohibition to receive to change it or
cargo at a naval
destination war with the power
4. embargo to which
5. inability of the was destined occurs
vessel to navigate
2. If a disease
RULES IN CASE breaks out and be
OF DEATH officially declared
OF A SEAMAN: an epidemic in
The seaman's heirs the port of
are entitled to destination
the payment as 3. If the vessel
follows: change owner or
1. if death is captain
natural:
a. compensation up to COMPLEMENT OF THE
time of death if VESSEL
engaged on - All persons on
voyage board, from the
b. if by voyage- captain to the
half of amount if cabin boy,
death occurs necessary for the
on voyage management,
out; and full if maneuvers, and
on voyage in service, thus
c. if by shares- including the crew,
none if before the sailing
departure; full if mates, engineers,
after departure stalkers and other
2. if death is employees on
due to defense of board not having
vessel- full specific
payment designations
3. if captured in - It does not
defense of vessel- include the
full payment passengers or
the person whom
4. if captured due the vessel is
to carelessness- transported
wages up to the
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
4. contain stipulation
a. Contract of not all requisites
Affreightment- are essential for
the owner the validity of
of the vessel charter party
leases
a part or Primage
all of the - belongs to
space of the owner/ freighters;
vessel to carry
goods - increase of
but retains the freight rate
the possession, - considered
command and gratuity to
navigation of master if is
the vessel. stipulated
The charter - a bonus to
merely has the be paid to a
use of the captain after a
space in the successful voyage
vessel in return Demurrage
for the - Sum which is
payment of fixed by the
the charter contract of carriage,
hire. or which is
allowed, as
b. Bareboat/ remuneration to
Demise the owner of a
Charterinvolve ship for the
the transfer detention of his
of full vessel beyond
possession and the number of
control of the days allowed
vessel to the by the charter
charterer. The party for
entire control loading/unloading/sailing.
and management
of the "Lay days"
vessel is given -days allowed to
up to charter parties
the charterer. for loading and
The charterer unlading
mans the vessel - period when
with his vessel will be
own people. delayed in port
(2003 Bar for loading and
exams) unloading.
"Extra Lay Days"
2. drawn in duplicate - days
3. signed by the parties which followed
after
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
5. suffer 3. to pay
deterioration/diminutions losses to
6. increase by natural others for
cause and loading
weight or size 2. error in tonnage or
flag
RIGHTS AND 3. failure to place
OBLIGATIONS OF the vessel at
CHARTER PARTY: the charterer's disposal
A. Of the ship owner
or ship agent 4. return of the vessel
due to pirates,
1. If the vessel is enemies or
chartered wholly bad weather
not to accept 5. arrival at the port
cargo from for repairs
others; B. At ship owners
2. To observe request
represented capacity; 1. If the extra lay
days terminate without
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
cargo being
placed COMMON ELEMENTS
alongside the vessel OF LOANS
ON BOTTOMRY
2. Sale by the owner AND RESPONDENTIA
of the vessel 1. exposure of security
before loading or marine
peril
C. Fortuitous causes 2. obligation of the
1. war debtor conditioned only
2. blockade upon safe arrival of
3. prohibition to receive security at
cargo the point of
4. embargo destination
5. inability of the HYPOTHECARY
vessel to navigate NATURE OF
D. LOANS ON BOTTOMRY
BOTTOMRY/ AND
RESPONDENTIA RESPONDENTIA:
(1961,1967,& 1980 General Rule:
bar exams) the obligation of
the borrower to
These loans pay is extinguished
are secured by if the goods
the owner or given as
captain of the security are
vessel for the use absolutely lost by
of the vessel. reason of an accident
In the case of of the voyage
loans on bottomry, designated, and if
the security of it is proven
the loan is the that the goods
vessel itself; while were on board.
loan on respondentia,
the security of EXCEPTIONS:
the loan is 1. loss due to inherent
the cargo. defect
2. loss due to the
The loan is in barratry on the
the nature of part of the captain
insurance. The loan
will only be paid 3. loss due to the
on the safe arrival fault or malice of
of the vessel the borrower
or cargo 4. that the vessel is
fails to reach engaged in
the port of contraband
destination, the creditor 5. that the cargo
loses loaded on the vessel
his right to recover be different
the amount of from that agreed
the loan. upon
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
3. If the effects
Bottomry/repondentia on which the
Simple money is taken
loan is not subjected to
any risk(729
Marine risk Code of commerce
Duly established Not Note: under existing
existence of necessary laws, the
a marine parties to a loan,
risk is whether ordinary
necessary or maritime,
Form and manner may agree on
Must be Formal any rate of interest
executed in requisites (Cb circular
accordance with of an 905); provided the
the form ordinary same is not contrary
contract to law, morals,
and manner good customs,
prescribed public order or
by public policy. Art
1306 NCC
will
suffice ACCIDENTS IN
MARITIME COMMERCE
lender (2000 bar
exams)
1 Averages
When loan on bottomry 2.Arrival Under stress
or respondentia
regarded as 3.Collision
Simple Loan 4.Shipwreck
1. Lender loaned an Average
amount larger
An extraordinary
than the value
or accidental expense
of the object
due to fraudulent incurred during
means employed by the voyage
the borrower(art in order to
726 code of preserve the cargo,
commerce) vessel or
2. Full amount of both, and all
the loan is not damages or
used for the cargo deterioration suffered
or given by the vessel
on the goods if from departure to
all of them the port of loading
could not have been to the
loaded, the balance consignment (art 806
will be Code of commerce)
considered a simple The person
loan( art 727 whose property has
Code of Commerce) been saved must
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
contribute to average(812)
reimburse the damage
caused or
expense incurred if
the situation
constitutes general
average.
value of
It is classified
the owners
into: (1) general or
property
gross average
saved
or (2) simple
or particular.
Right to recover
No There may
reimbursement be
Particular/ simple
Gross/
reimbursement
general
Definition
Requisites of Gross
Damages or Damages or General
expenses expenses
average
caused 1. Common danger
to the deliberately
vessel caused in that both the ship
or order to and the cargo,
cargo that did save the
after has been
not vessel, its
loaded, are subject
inure to the cargo orboth
to the voyage,
common from
benefit, real and or in the
and known risk.(811) port of loading
borne by or unloading
respective that the danger
owner.( arises from the
art
809) accidents
Liability of the
The owner All persons sea,
of the having dispositions
goods an of the
interest authority
which gave rise the or faults
to the vessel and of
expense the cargo men,
or therein provided
suffered the that the
at
the time circumstances
damage
the
shall bear this producing
average
shall contribute the peril
average.(810) should be
to
satisfy this ascertained
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
of skill
The 1. The
inability lack ship
to owner
continue of
voyage is ship
due to provisions agent
lack of
provisions, due liable
well to
founded case
fear of negligence of
seizure, to unlawful
privateers,
pirates or carry arrival
accidents according under
of the stress.
sea to But
disabling they
it to usage shall Cases of collision:
navigate and not 1. Due to the fault,
negligence or
customs; liable lack of skill of
for the captain, sailing
2.risk of damages mate or the
complement of the
enemies caused vessel--under 826,
not by the ship owner
shall be liable
well-known reason for the losses
of and damages
or 2. Due to the fault
manifest; lawful of both vessels --
arrival. -> under 827,
3.defect each vessel shall
suffer its own losses,
due but as regards
to the owners of
the cargoes,
both vessels shall
improper be jointly and
severally liable
repair; 3. Where it cannot
4.malice, be determined which
of the 2
negligence, vessels is at
fault --> under
lack 828, each vessel
of shall suffer
its own losses,
foresight, and both shall also
lack be solidarily
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Zones in time of
collisions (3 time
zones):
--> within
this zone, no
rule is applicable
because none is
necessary. Each vessel
is free to
direct its
course as it deems
best with
reference to the
movements of the
other vessel.
Effect of fault
of privileged vessel
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
3. If it cannot
be determined Injuries to persons
which vessel is and damage to
at fault, each cargo of
vessel shall owners not on
suffer its own loses board on time of
and both shall collision need not
be solidarily liable be protested.
for loses Article 835, Code
or damages on of Commerce:
the cargo. In case of
(DOCTRINE OF collision, there
INSCRUTABLE FAULT) must be a
marine protest
4. The vessels may to recover
collide with each collision damage;
other through in such a
fortuitous event case, the
or force marine protest
majeure. In which is a condition
case, each sine qua non and
shall bear its own not merely a
damage. disclaimer unlike
5. Two vessels may in the case of
collide without their
arrival under stress
fault but
and shipwreck.
by reason of
a third vessel.
The third CARRIAGE OF GOODS
vessel shall be liable BY SEA ACT
for losses
and damages Applicable to all
sustained. transportation of
Requisite for goods by sea in
RECOVERY arising foreign trade
from collision: to and from
1. Protest must Philippine ports
be made within AND does not
24 hours apply to purely
before: domestic transport.
a) Competent authority
at the point Laws applicable
of collision or to a contract
for the carriage
b) At the first port of goods
of arrival, if by sea:
in the Philippines
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
(1992, 1995, -
20000 & 2005 To discover
bar exams) who
was
If the damage at
is apparent, then fault
notice must be
immediately given. -In case of
The notice may transshipment, to
either be in writing determine, when
or orally. and where damage
occurred.
If the damage is
not apparent, Code of
notice must be given Commerce: Art. 366
within three apparent - protest
days from such at time of
delivery. receipt
non-apparent -
Failure to give notice within 24 hours
is not a after receipt
bar to the action
to file provided WARSAW:
the filing of
Art. 26
the suit is made
the carrier
within one
year from delivery to and the agent
consignee. shall
be
Notice requirements: discharged form
liability in
COGSA: Sec. respect of
3(6) loss or
damage unless
If loss or damage
suit is
is apparent -
brought within
protest as
1 year
soon as receipt of
from:
goods
(1) in case of
If not apparent -
damaged goods:
> within 3
from the time delivery
days of delivery
of the goods
was made
Rationale behind
(2) in case of non-
the 3-day notice
delivery (i.e., lost
and relatively
goods): from
short
the
prescriptive period:
date the goods
- To
should have been
provide carrier
delivered
an opportunity to
look for the lost
goods
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
of vessel where it
or cargo; will be
B. Such object delivered to
must the Municipal
have been Treasurer or
exposed to the
to marine Collector of
peril; Customs who
C. Salvage will
services must advertise the fact
be of salvage;
rendered B. If owner
voluntarily, of salvaged
i.e., not vessel
arising from appears, he
pre-existing may take
duty; possession
D. Salvage effort of the vessel
must be and must
successful. pay a
reward, the
II. SHIPWRECK AND amount of
DERELICT: which is
A. Shipwreck. not more than
A shipwreck 50% of
refers to the value
the injuries of the vessel;
suffered by
the vessel C. If no claim
disabling the for the
latter for vessel is
navigation. made within
B. Derelict. It 3
refers to months after
the vessel the
or cargo publication
abandoned of the
at sea by advertisement,
those the Municipal
entrusted by Treasurer will
such vessel sell the
or cargo. property saved
A derelict at a
is a public auction
vessel and the
A. If the vessel reward and
is expenses shall
abandoned, be deducted
salvor must from the
tow it proceeds. The
to the balance is
nearest port
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
deposited with
the Treasury;
D. If no one Convention for the
claims the Unification of Certain
same after Rules
3 years, Relating to
shall go International
to the salvors Transportation
and the by Air The
other half Warsaw Convention:
to the mandates carriers
government. to issue
passenger tickets;
IV. CONSIDERATIONS
IN DETERMINING requires carriers
THE to issue
AMOUNT OF baggage checks
REWARD for checked
1.) First case luggage;
A. Value of the property creates a
saved; limitation
B. Zeal employed by period of 2
those who made years
the salvage; within which
C. Danger to the a claim
lives of those must be
who participated; brought
D. Number of persons (Article 29);
who took part; and limits a
E. Services rendered; carrier's
F. Expenses incurred liability to at
most:
2.) Second case:
250,000
If one
vessel saves
Francs
another vessel,
or
the reward
going 16,600
to the former
shall be Special
divided as
follows: A. Drawing
to the ship
owner; Rights
B. to the captain;
and (SDR)
C. to the crew. for
personal
WARSAW CONVENTION
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
of a single
injury; High Contracting
Party, if there
17 SDR is an agreed
per stopping place
within a
kilogram territory subject
for to the sovereignty,
suzerainty, mandate
checked or authority
of another Power,
I. NATURE AND SCOPE even though
OF WARSAW that Power
CONVENTION is not a party
to this
SCOPE: Applies Convention.
to all
international carriage The Warsaw
of persons, luggage Convention to which
or goods the Republic
performed by aircraft of the Philippines is
for reward. It a party and
applies equally which has the force
to gratuitous and effect of
carriage by aircraft law in this country
performed by applies to
an air transport all international
undertaking. transportation of
persons, baggage
International or goods
Carriage: performed by an
Means any carriage aircraft gratuitously
in which, or for hire.
according to the
contract made When a contract
by the parties, of carriage is a
the place of contract of
departure and the international transportation,
place of provisions of
destination, whether the
or not there Convention
be a break automatically apply
in the carriage and
or a exclusively govern
transshipment, are the rights
situated either and liabilities
within the of the
territories of two airline and its
High Contracting passengers.
Parties, or within (American Airlines
the territory vs. CA,
G.R. No.
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
4. TELECOMMUNICATIONS-
National
Telecommunications
Commission, which
has been
placed under
the DOTC
as an
attached agency.
Boards,
5. ENERGY- Board commissions are
of Energy but not judicial
transferred to the tribunals and
Energy Regulatory Board therefore cannot
(ERB) determine
6. WATERWORKS- National judicial questions
Water such as validity
Resources of contract.
Council
4. Jurisdiction:
LIMITATIONS ON Extends only to
THE persons
engaged in
POWERS OF
public utilities, or
THE without
over a
due process of
public utility,
law nor which holds a
confiscating or Certificate of
appropriating private Public
property without Convenience.
just compensation.
B.
JURISDICTION
General Rule:
Over persons
engaged in
public
utilities, or
over a public
utility,
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
Service of a
Public Utility
considered Unlawful Liability of
It shall be Registered Owner
unlawful for any and Authorized
public service to Operator under
provide or the Kabit System
maintain ant and Boundary
service that is System
unsafe, improper, Both the
or inadequate, registered owner
or withhold or and the Authorized
refuse any service operator of a
which can be common carrier
reasonably be under the Kabit System
demanded and are jointly
furnished as and severally
founded and (solidarily) liable
determined by the for any death or
injury to
Commission in a
the passengers and
final order which
loss/damage to the
shall be goods.
conclusive
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
TRUST RECEIPTS
1. A trust receipt
is a
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
the extent of
the amount
owing to the entruster
(c) to insure
the goods
for their total value
against loss
from fire, theft,
pilferage or other
casualties (d) to
keep the goods
or the
proceeds thereof,
whether in money
or whatever
form, separate and
capable of
identification as property
of the
entruster; and (e)
to return the
goods,to the entruster
in case they
could not be sold or
upon demand of
the entruster.
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
10.1 A
negotiable
receipt is
negotiated
by indorsement
when the
goods are, by the
terms of the
receipt, deliverable
to a specified
person (Section 38,
Warehouse Receipts
Law)
foreclosure. The
prescriptive 1. The resort to
period for which the process of
is ten (10) extra-judicial foreclosure
years. emanates from the
presence of a
3.4. Note that stipulation that allows
when the financing the
company to whom creditor/mortgagee to
a loan and extra-judicially
chattel mortgage foreclose and
have been designating the said
refinanced had been party as the
constituted as attorney-in-fact of
the attorney-in-fact the mortgagor to
of the borrower cause the same
to file any and to sell the
insurance claim subject property
covering the chattel, at a foreclosure
and it failed sale by an
to do so insertion into or
upon a total loss of attachment to
the same, the real estate
will relieve the mortgage.
borrower-mortgagor of
his obligation (BA 1.1When a debt is
Finance Corporation secured by a
v. CA, 201 real estate
SCRA 157) mortgage, the
creditor has two
3.5 There are options: (a) to
limitations on the foreclose, or (b)
enforcement of chattel file an ordinary
mortgages action to collect.
executed in relation If he avails
to the sale of the option
of personal property to foreclose, he
in installments, is still allowed
where the to bring a claim
remedies agreement for any
to the contrary deficiency. On the
shall be void (Art. other hand, if
1484, he avails of
N.C.C.). This the option to
remedies are exclusive file an ordinary
not alternative. action, he abandons
or waives his
EXTRA-JUDICIAL mortgage lien,
FORECLOSURE OF without prejudice
REAL ESTATE to his levying
MORTGAGES:
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
interest of all
concerned, and the
summary closure 1. Liquidation shall take
pales in comparison place is the
to the protection receiver determines
afforded public that the institution
interest. At cannot be rehabilitated
any rate, the or permitted
bank is given to resume
full opportunity to business, the
prove arbitrariness Monetary Board
and bad faith in shall notify in
placing the bank writing the Board
under receivership, in of Directors of
which event, its findings and
the resolution direct the receiver
may be properly to proceed with
nullified and the the liquidation of
receivership lifted the institution.
as the trial court
may determine. 2. The following are
Until such determination the mandatory
is made, requirements to be
the status quo complied with before
shall be maintained, a bank found
i.e., the bank to be
shall continue to insolvent can be
be under ordered close:
receivership. (1) an examination
shall be conducted
by the appropriate
1.6 Receivership is CB department as
equivalent to to the condition
an injunction to of the bank
restrain in the (2) disclosed in
bank officers from the examination
intermeddling with the is that the
property of the condition of the
bank in any way. bank is one of
Thus, the appointment insolvency (3) the
of a receiver
director shall inform
operates to
the Monetary
suspend the authority
Board in writing
of the bank
and of its directors of such fact, and
and officers (4) the Monetary
over its property Board shall find the
and effects statement of the
(Villanueva vs. CA, department to be
244 SCRA 395) true (Banco
Filipino vs.
Liquidation: Monetary
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
payment of a is compulsory as
prepayment fee) as engage in the
may be agreed business or
upon between the receiving deposits,
bank and borrower. shall be insured
with PDIC.
by any matter of
official or litigation42;
employee e) Upon order of
of any the court or
banking subpoena issued
institution by the Ombudsman
to any in cases
unauthorized of unexplained
person wealth43; This is
of any information subject to the
concerning said deposits. following requisites:
creditor-debtor (1) only an in-
relationship is created camera inspection is
between the allowed (2)
bank and the client.41 there must be a
pending case
The law does before a court
not apply of competent
to money market jurisdiction (3) account
placements as is clearly
they are not identified (4)
deposits, rather, examination is limited
they are trades to account
in short term subject of the
negotiable court case, and
instruments such (5) bank
as securities or personnel and the
treasury bills. account holder
must be notified to
3)What disclosures be present
or inquiries into during the inspection.
deposits are not f) Upon order of
prohibited? the Commissioner
of Internal Revenue
a) Upon written in respect of
permission of the the bank deposits
depositor; of a
b) In cases of decedent for the
impeachment; purpose of
determining such
c) Upon order of a
decedents gross
competent court
estate44;
in cases
g) Upon order of
of bribery or the Commissioner
dereliction of Internal Revenue
of duty of public when a
officials; taxpayer files an
d) In cases where application to
the money compromise his tax
deposited or invested liability by reason
is the subject of financial
incapacity45;
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
f) Is likely
to mislead - any person
thepublic; who believes
g) Generic signs for that he is
goods or services; and will be
h) Customary in damaged by
everyday the registration of
language or a mark
in 2. Where to file?
established trade - BLA
practice; 3. Grounds:
i) Designate the kind, a) Mark becomes generic
quality, quantity, for goods
intended purpose, for which it is
value, geographical registered;
origin, time or b) Abandonment of the
production of the mark;
goods or services; c) Registration obtained
j) Shapes necessitated fraudulently
by technical or contrary to
factors; provisions of
k) Color alone, unless RA 8293;
defined by a d) Mark used by,
given form; or with permission
or of, registrant;
l) Is contrary to e) Non-use within
public order or the Philippines for 3
morality uninterrupted
years or longer.
FILING DATE -may be
OF AN APPLICATION excused
if
-The filing date of caused
an application by
shall be the date circumstances
on which the arising
office received the
following indications independently
and elements in of
English or Filipino: the will
of the
NO filing trademark
date shall be owner, such
accorded until as
the required military
fee is paid coup, or
(Sec. 127.2) political
changes
CANCELLATION OF that impede
TRADEMARK OR
TRADENAME commerce
1. Who may file?
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
WHAT CONSTITUTES
AN INFRINGEMENT
-Under RA
8293, any person
shall, without the
consent of the
owner of the
registered mark:
1) Use in
commerce any
reproduction,
counterfeit, copy,
or
colorable
imitation of
a registered
mark or the
same container
or a
dominant
feature
thereof in
connection with
the sale,
offering for
sale, distribution,
advertising
any goods
or services
including other
preparatory
steps necessary
to carry
out the sale
of any goods
or
services on
or in
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
it allows an ideas(2004,2006,2007,200
exchange on the 9 bar exams)
basis of equality Works are
and reciprocity, protected by
frowning only on the sole fact
foreign competition of their
that is unfair. creation, irrespective
of their
GATT itself has
mode or form
provided built-in
of expression,
protection from unfair
as well as
foreign
their content,
competition and trade
quality or
practices
purpose (Sec. 172.2)
including anti-
dumping measures,
Protection
countervailing
extends only to
measures and
the expression
safeguards against
of the idea,
import surges.
not to the
Where local
idea itself or
businesses are
to any
jeopardized by unfair
procedure,
foreign
system, method
competition, the
or operation,
Philippines can avail
concept or
of these
principle,
measures. There
discovery or
is hardly
mere data.
therefore any basis
The copyright
for the
is distinct from
statement that under
property in the
the WTO,
material object
local industries and
subject to it.
enterprises will all
Copyright, in
be wiped out
the strict sense,
and that Filipinos
is purely
will be deprived
statutory right.
of control of
Being mere
the economy
statutory right,
(Taada vs.
it is limited
Angara GR No. 118295)
to what the
statute confers.
LAW ON COPYRIGHT It may be
obtained and
enjoyed only with
COPYRIGHT respect to the
system of legal subjects and by
protection an the persons,
author enjoys in and on terms
the form of and conditions
expression of
GREEN NOTES IN COMMERCIAL
LAW
Prepared by: ATTY. RENATO S. RONDEZ
(Dean,College of Law)