COMMERCIAL LAW REVIEW

Atty. M. Reyes
Saturdays, 9-4 pm

CREDIT TRANSACTIONS

I. Trust Receipts Law (PD 115)

1) What is a trust receipt

Read: Sec. 3, PD 115

Rosario Textile Mills Corp. v. Home Bankers Savings, GR no. 137232, June 29, 2005

2) What is a trust receipt transaction

Read: Sec. 4, PD 155

3) Who are the parties in a trust receipt transaction

4) What is a security interest

5) What are the obligations of the entrustee in a trust receipt transaction

Read: Sec. 9, PD 155

Metropolitan Bank v. Gonzales, GR no. 180165, April 7, 2009

6) What are the rights of the entruster

Read: Sec. 7, PD 155

7) When does it not constitute a trust receipt transaction

Read: Sec. 4, PD 155

Ng v. People, GR 173905, April 23, 2010 (where goods never intended for sale)

Hur Tin Yang v. People, GR 195117, August 14, 2013 (when return of goods not possible)

8) Who owns the goods covered by a TR; who bears the loss

Read: Sec. 4, 10, PD 155

Rosario Textile Mills v. Home Banker (when bank made to appear as owner of goods)

Colinares v. CA, GR 90828, Sept. 5, 2000 (when transaction is simple loan)

9) Effect of loss of goods pending disposition

Read: Sec. 10, PD 155

Rosario Textile Mills V. Home Banker (was entrustee’s obligation extinguished)

10) What are the two features of a TR

Read: Rosario Textile Mills (loan and security)

11) Rights of a purchaser for value and in good faith

Read: Sec. 11, PD 155

12) Who are bound by the security interest of the entruster

Read: Sec. 12, PD 155

Prudential Bank v. NLRC, GR 112592, December 19, 1995 (exception)

13) Acts punishable as estafa

Read: Sec. 13, PD 155

Art. 315 par 1(b), Revised Penal Code

Ching v. Secretary of Justice, GR 164317, February 6, 2006 (when entrustee is a

corporation)

West Coast Life Ins. Co. v. Hurd, GR L-8527, March 30, 1914 (corporate agents liable)

Gonzales v. Hongkong and Shanghai Bank, GR 164905, Oct. 19, 2007 (juridical entity cannot
be arrested, imprisoned)

14) Nature of the offenses punishable under the TR Law

Read: Gonzales v. Hongkong and Shanghai Bank (malum prohibitum)

15) Can a civil action be filed against the entrustee

Read: Sarmiento v. CA, GR 122502, Dec. 27, 2002 (is civil action proper)

16) Effect of returning goods to entruster on obligation secured by TR

Read: Landl & Co. Inc. v. Metropolitan Bank and Trust Co., GR 159622, July 30, 2004 (was
loan obligation satisfied)

17) Effect of loan restructuring on criminal liability

 Read: Transpacific Battery Corp. v. Security Bank, GR 173565, May 8, 2009 (no
extinguishment of criminal liability)

PNB v. Soriano, GR 164051, October 3, 2012 (no novation)

Pilipinas Bank v. Ong, GR 133176, August 8, 2002 (when obligation extinguished)

18) Remedies of Entruster against Entrustee

19) Is contract of agency created by TR

II. Letters of Credit

1) What is a letter of credit

Read: Art. 567, Code of Commerce

Prudential Bank v. IAC, 216 SCRA 257, 1992 (definition of LC)

Bank of America, NT & SA v CA, GR 105395, Dec. 10, 1993 (arrangement under LC)

2) Governing Laws

a. Code of Commerce

b. Customs (Uniform Customs and Practice for Documentary Credits or UCP)

3) Parties in an LC transaction

a. Buyer/applicant

b. Seller (beneficiary)

c. Issuing bank

d. Advising (notifying) bank

e. Confirming bank

f. Paying bank

g. Negotiating bank

Read: MWSS v Daway, GR 160732, June 21, 2004 (solidary liability of issuing bank)

Bank of America v. CA (role of the seller in an LC; when notifying bank acts as negotiating
bank)
 h. Correspondent bank
4) Independence Principle in LCs

Read: Keng Hua Paper Products v. CA, 286 SCRA 257, 1998 (three independent contracts)

BPI v. De Reny Fabric, 35 SCRA 256 (are banks concerned with description of goods in LC)

Transfield Philippines v. Luzon Hydro Corp., GR 146717, November 22, 2004 (is issuing
bank duty bound to ensure compliance with main contract)

5) Fraud Exception

Read: Tranfield v. Luzon Hydro (when there is fraud, forgery)

6) Kinds of LC

a. Confirmed, unconfirmed

b. Irrevocable, revocable

c. Revolving

d. Back to back

e. Standby

f. Difference between commercial and standby LC

g. Difference between irrevocable and confirmed LC

Read: Feati Bank v. CA, GR 94209, April 30, 1991

7) What is a draft in relation to LCs

8) Doctrine of Strict Compliance

Read: Feati Bank v. CA

Art. 13, UCP 500; Feati

III. Mortgage

1) Requisites common to real estate mortgage, chattel mortgage, pledge

Read: Art. 2085, New Civil Code

2) Features of Mortgage
 a. There must be a valid principal obligation

b. Consideration for the mortgage

c. Can third person mortgage his property to benefit another

d. Mortgage is indivisible

e. How much does mortgage secure

Read: Art. 2086, 2052, NCC

Filipinas Marble Corp. v. IAC, 142 SCRA 180, 1986 (consideration for the mortgage)

Vda de Jayme v. CA, 390 SCRA 380, 2002 (can third party mortgage his property for debtor;
mortgage is indivisible)

Landrito v. CA, 466 SCRA 107, 2005 (amount that mortgage secures)

3) Real Estate Mortgage

a. Subject of REM

b. Effect of Registration of REM

c. Mortgagee in Good Faith

Read: Ursal v. CA, 473 SCRA 58, 2005 (can banks rely on the title)

d. Nature of REM

Read: Ramirez v. CA, 409 SCRA 133, 2003 (is just possidendi, jus disponendi included)

Rizal Commercial Banking Corp. v. CA, 289 SCRA 292, 1998 (right of first registered
mortgagee)

e. Can after acquired property be included in the mortgage

Read: Mendoza v. CA, GR 116710, June 25, 2001 (by stipulation)

f. Can REM secure future obligations

Read: Quintinilla v. CA, 279 SCRA 397, 1997 (general rule; exception)

g. Foreclosure of mortgage

1. Extrajudicial Foreclosure Sale (Act no. 3135)

2. Judicial Foreclosure (Rule 68, Rules of Court)

3. Ordinary Execution Sale (Rule 39, Rules of Court)

Read: Concepcion v. CA, 274 SCRA 614, 1997 (ordinary execution sale)

BPI Savings Bank v. Vda de Coscolluela, 493 SCRA 472, 2006 (waiver of action for collection
of debt)

Flores v. Sps. Lindo, GR 183984, April 13, 2011 (alternative remedies)

h. Extrajudicial Foreclosure

Read: Act no. 3135

SC Circular AM no. 99-10-05-0

1. When is it available

Read: Sec. 1, Act 3135

Casano v. Magat, 374 SCRA 508, 2002 (when there is express authority)

2. How is it initiated

Read: AM 99-10-05-0

3. Venue/Filing Fee

Read: AM 99-10-05-0

Sps. Ochoa v. China Banking, GR 192877, March 23, 2011 (stipulation of parties)

Benguet Management Corp. v. CA, 411 SCRA 347, 354, 2003 (venue)

4. Requirements of Notice/Publication

Read: Act 3135 (where to post and publish and how many places/publications)

MTBTC v. Wong, GR 120859, June 26, 2001 (effect of non-compliance)

Ouano v. CA, 398 SCRA 525, 2003 (what if date of sale changed)

Carlos v. CA, GR 154036, Oct. 19, 2007 (is personal notice necessary; exception)

i. Is certificate of posting necessary

5. Sale Price

Suico Rattan v. CA, 490 SCRA 560, 2006 (effect if sale price lower than market value)

BPI Family Savings v. Avenido, GR 175816, Dec. 7, 2011 (can creditor recover deficiency)
 6. Possession after Foreclosure

Read: Sec. 7, Act 3135

Sps. Edralin v. Phil. Veterans Bank, GR 168523, March 9, 2011 (is highest bidder entitled to
possession during redemption period)

Cahilig v. Terencio, GR 164470, Nov. 28, 2011 (when possession becomes matter of right)

7. Redemption

Read: Sec. 6, Act 3135 (Redemption period)

Sec. 47, General Banking Law (if mortgagee is a bank and mortgagor is a natural/juridical
person)

8. Redemption Price

9. Prescription of mortgage action

4) Chattel Mortgage (Act no. 1508)

a. What is chattel mortgage

1. Is it the same as a conditional sale

b. Subject matter of CM

Read: Art. 416-417, New Civil Code (what a CM covers)

Tsai v. CA, GR 120098, Oct. 2, 2001 (Can immovable property be subject of CM)

1. Can machinery be subject of CM

2. CM on vessels, where to register

3. CM on shares of stocks, where to register

4. CM on motor vehicles, where to register

5. Can buildings be subject of chattel mortgage

Read: Tumalad v. Vicencio, 41 SCRA 143, 1971

Makati Leasing v. Wearever Textile, 122 SCRA 296, 1983

Evangelista v. Alto Surety, 103 SCRA 401, 1958

c. Can CM cover after-acquired properties

Read: Sec. 7(4), Act 1508; Tsai v. CA

Northern Motors v. Coquia, 66 SCRA 415, 1975

d. Can CM cover after-incurred obligations

Read: Acme Shoe v. CA, 260 SCRA 714, 1996

e. Formalities

1. Where to register CM; effect of registration/non-registration

2.
Read: Sec. 4, 1508

3. Affidavit of Good Faith

Read: Cebu International Finance Corp. v. CA, 268 SRA 178, 1997

Sec. 5, Act 1508

f. Description of property in CM

Read: Sec. 7, Act 1508

Saldana v. Philippine Guaranty Co., GR L-13194, Jan. 29, 1960

g. Effect of unnotarized CM

Read: Union Bank v. Juniat, GR 171569, Aug. 1, 2011

h. Right of redemption

Read: Sec. 13, Act 1508 (who can redeem)

Cabral v. Evangelista, 28 SCRA 1000, 1969 (right of redemption after foreclosure sale)

i. Deficiency after foreclosure

Read: Bicol Savings v. Guinhawa, 188 SCRA 642, 1990 (can mortgagee recover deficiency)

Art. 1484 New Civil Code, Recto Law (exception)

j. Recto Law (Art. 1484, NCC)

1. Remedies of vendor in sale of personal property on installment

2. When is Recto Law applicable

3. Effect of foreclosure on deficiency

IV. Warehouse Receipts Law (Act no. 2137)

1) Documents of titles to goods

Read. Art. 1636, New Civil Code

2) Common Types

a. Bill of Lading

b. Warehouse receipt (Sec. 58a, Act 2137)

c. Quedan

d. Dock warrant

e. Functions of documents of title

Read: Telengtan Brothers v. CA, 236 SCRA 617 (as contract and receipt)

3) Formalities

Read: Sec. 2, 3, WRL

4) Negotiation of warehouse receipts

a. By delivery only

Read: Sec. 37, WRL

b. Indorsement coupled with delivery

Read: Sec. 38, WRL

5) Effect if indorsement necessary but negotiable receipt only delivered

Read: Sec. 43, WRL

6) Effect of negotiation of WR

Read: Philippine Trust Co. v. National Bank, 42 Phil 413, 1922 (manual delivery)
Sec. 41, WRL

7) Vendor’s lien

Read: Sec. 49, WRL

8) Pledge of WR
Read: Sec. 58, WRL

9) Who may negotiate WR

Read: Sec. 40, 47, WRL

10) Warranties of transferor

Read: Sec. 44 WRL

11) Indorser not guarantor

Read: Sec. 45, WRL

12) Non-negotiable receipts

Read: Sec. 4, 7, WRL

13) Rights of transferee of non-negotiable WR

Read: Sec. 42, WRL

14) Warehouseman’s defenses for non-delivery or misdelivery

Read: Sec. 8, 10, 25, 26, 16, 17, 31, 36

Philippine National Bank v. Sayo, GR 129918, July 9, 1999

15) Warehouseman’s lien

Read: Sec. 27, 30, WRL

16) Properties subject to lien

17) How lien on goods is lost

Read; Sec. 29, WRL

18) Adverse claimant

Read: Sec. 17, WRL

19) Attachment or levy upon goods for which negotiable receipt issued

Read: Sec. 25, WRL

20) Creditor’s remedy to reach negotiable receipt

Read: Sec. 26, WRL

V. General Bonded Warehouse Law (Act 3893, RA 247)

1) Obligations of Warehouseman

VI. Bulk Sales Law (Act 3952)

1) When is there sale and transfer in bulk

2) Purpose of the law

3) Formalities required by BSL

Read: Sec. 3, 4, BSL

4) When formalities not required

5) Effects of violation of BSL

6) Fraudulent and void sale, transfer, mortgage

VII. Financial Rehabilitation and Insolvency Act of 2010 (RA 10142) and Concurrence
and Preference of Credits (Arts. 2241-2244, New Civil Code)

1) Purpose of FRIA (Sec. 2)

2) Key definitions

a. Debtor

b. Insolvent

c. Liabilities

d. Ordinary course of business

e. Creditor

f. Commencement date

g. General unsecured creditor

h. Secured creditor

i. Lien
3) Proceedings covered by FRIA and persons who will file and/or approve

a. Voluntary rehabilitation (Sec. 12, FRIA), involuntary rehabilitation (Sec. 13), pre-
negotiated rehabilitation (Sec. 76), voluntary liquidation (Sec. 90), involuntary
liquidation (Sec. 91) for:

1. Sole proprietorship

2. Partnership

3. Corporation

b. Suspension of payment (Sec. 94, FRIA), voluntary liquidation (Sec. 103), involuntary
liquidation (Sec. 105) for:

1. Individual debtor

4) When group of debtors can file petition for voluntary rehabilitation (Sec. 12)

5) Debtors excluded from FRIA (Sec. 5)

6) Rehabilitation defined (Sec. 4gg)

a. Grounds for rehabilitation of sole proprietorship, partnership, corporations (Sec. 12,

13)

b. What is a rehabilitation plan; contents of a rehab plan

Read: Sec. 62, 63, 68, FRIA

c. What is the cram down rule

Read: Sec. 69, 82, 86, FRIA

d. Commencement and Stay order

Read: Sec. 16, FRIA

PAL v. Spouses Kurongking, GR 146698, Sept. 24, 2002

e. Suspended claims; rationale for suspension of claims

Read: Sec. 3, FRIA

PAL v. Kurongking

Rubberworld Phils. Inc. v. NLRC, 305 SCRA 721, 1999

Sps. Sobrejuanite v. ASB Dev. Corp., GR 165675, Sept. 30, 2005

 f. Preferred status of secured credits

Read: RCBC v. IAV, 213 SCRA 830, 1992

g. Exceptions to stay or suspension order

Read: Sec. 18, FRIA

h. Who will manage during rehabilitation

i. Court action on petition for rehabilitation

Read: Sec. 25, FRIA

j. Jurisdiction over petitions for rehabilitation

Read: AM No. 12-12-11-SC on rehabilitation

AM No. 150940960SC on liquidation

7. Out-of-court rehabilitation

Read: Sec. 84, FRIA

a. Standstill period (Sec. 85)

b. Cram down rule for out-of-court rehab

6. Suspension of payments

Read; Sec. 94

a. Distinctions between Suspension of Payments and Liquidation

b. Distinctions between Suspension of Payments and Rehabilitation

c. Suspension order

Read: Sec. 96

d. Creditors not affected by stay order (Sec. 98)

e. Prohibited acts

Read: Sec. 95

f. Creditors meeting

Read: Sec. 97, 90, FRIA

 7. Liquidation of Individual Debtors

a. Voluntary (Sec. 104)

b. Involuntary (Sec. 105, 107, 108)

c. Involuntary liquidation of individual debtor vs. involuntary liquidation of business

organizations

d. Liquidation process

e. Liquidation order (Sec. 112)

f. Effects of liquidation order (Sec. 113)

g. Rights of secured creditors (Sec. 114)

h. Distribution of Assets

Read: Sec. 133, FRIA

Arts. 2241-2242, New Civil Code

Arts. 2246-2249, NCC

Art. 2250-2251, NCC

i. Preference as to specific properties

1. Preference of claims and liens as to specific movable or personal property (Sec.

2241, NCC)

2. Preference with respect to specific immovable or real property (Art. 2242)

3. Order of preference with respect to other properties (Art. 2244, NCC as modified
by Art. 110, Labor Code

j. Cross-border insolvency

Read: Sec. 139-141, FRIA

BANKING

I. The General Banking Law (RA 8791)

1) General Concepts

a. What does it govern

b. What are banks? (Sec. 3.1, 8, GBL)

 Read: Republic v. Security Credit, GR L-20583, Jan. 23, 1967

c. What are quasi-banks? (Sec. 4, GBL)

d. What are deposit substitutes (Sec. 95, New Central Bank Act)

2) Nature of banking business

Read: Sec. 2, 22, GBL

Central Bank v. CA, 208 SCRA 652

Simex International v. CA, 183 SCRA 361

a. Diligence required of banks

Read: Citibank NA v. Cabamongan, GR 146918, May 2, 2006

3) Authority to incorporate and operate

Read: Sec. 6, 14, GBL

4) Classification of banks (Sec. 3.2)

a. Universal banks

b. Commercial banks

c. Thrift banks (RA 7906)

d. Rural banks (RA 7353)

e. Cooperative banks (Sec. 100, RA 6938 as amended by RA 9520)

f. Islamic banks (RA 6848)

g. Other classifications as determined by the Monetary Board

5) Distinctions

a. As to capitalization

b. As to purpose

c. As to powers or functions

d. As to who can be directors

e. As to incorporators
 f. As to foreign equity

g. As to necessity of public offering

6) Functions of banks

a. Deposit function

b. Loan function

c. Prohibited acts

7) Deposit function

Read: Tang Tiong Tick v. American Aphothecaries, 65 Phil. 414 (deposit not for
safekeeping)

Guingona v. City Fiscal of Manila, 128 SCRA 577 (no liability for estafa)

Gullas v. PNB, 62 Phil 519 (right of compensation)

a. Relationship between depositor and bank (simple loan)

Read: Lucman v. Malawi, GR 158794, Dec. 19, 2006

b. Jurisdiction in case bank directors, officers engage in unsafe, unsound banking

practices

Read: Arcenas v. Marella, GR 168332/169053, June 19, 2009

c. Who can be depositors (rule as to minors, married women)

Read: PD 734, Sec. 1

RA 7192 (on married women opening bank accounts)

d. Kinds of deposits

1. Demand deposits

2. Savings account

3. NOW accounts

4. Time deposits

5. Other accounts (joint accounts, anonymous accounts, and/or accounts)

Read: Sec. 9, RA 6426, Foreign Currency Deposits Act

 Vitug v. CA, GR 82027, March 29, 1990

e. Unclaimed Balances Law (Act 3936)

8) Loan Function of banks

a. Single borrower’s limit (Sec. 35.1, 35.2, GBL)

b. DOSRI (Art. 26, NCBA)

1. MB regulations on DOSRI

2. Individual ceilings

c. Collateral

1. Value of collateral (Sec. 37, 38, GBL)

d. Foreclosure of Mortgage (Sec. 47, GBL)

1. Redemption period

2. Redemption price

3. Possession

4. Injunction and bond

e. Prohibited acts of borrowers

9) Ownership of banks

a. Individuals and non-banks (Sec. 11, GBL)

b. Foreign stockholdings (Sec. 11)

c. Stockholdings of family groups and related interests (Sec. 12)

10) Directors and officers

a. Composition of board (Sec. 15 and 19, GBL)

b. Qualifications

1. Fit and proper rule (Sec. 16)

11) Dividends

12) Regulations maintain liquidity and security

 Read: Sec. 34, 41, 57, GBL

13) Ownership of real property

Read: Sec. 51, 52, GBL

14) Loans to banks

Read: Sec. 83, 84

15) Conservatorship (Sec. 29)

a. Powers of conservator

Read: Philippine International Bank v. CA, GR 115849, Jan. 24, 1996 (extent of authority of
conservator under Central Bank Law)

b. When order for conservatorship may be set aside

Read: Central Bank v. CA, GR 88353, May 8, 1992

16) Receivership and liquidation

a. PDIC as statutory receiver

b. Duties of receiver

c. Extents of power of receiver

Read: Abacus Real Estate v. Manila Banking, GR 162270, April 6, 2005

d. Close now-hear later

Read: Rural Bank of Lucena v. Arca, GR L-21146, Sept. 20, 1965

Vivas v. Monetary Board, GR 191424, Aug. 7, 2013

Rural Bank of San Miguel v. MB, GR 150886, Feb. 16, 2007

e. Effects of receivership and liquidation

Read: Sec, 30, 82, NCBA

Lipana v. Development Bank of Ruzal, 154 SCRA 257

Provident Savings Bank v. CA, 222 SCRA 125

Manalo v. CA, GR 141297, Oct. 8, 2001

Fidelity Savings v. Cenzon, 184 SCRA 141
 Larrobis v. Phil. Veterans Bank, GR 135706, Oct. 1, 2004

f. Judicial review

Read: Central Bank v. CA, 106 SCRA 143

Sec. 29, 30, NCBA

17. Trust operations of banks

a. What is a trust business

Read: Sec. 87, 79, 80

18. Dragnet or blanket mortgage clause

Read: Producers Bank v. Excelsa Industries, GR 152071, May 8, 2009

19. In what currency/exchange rate should monetary obligation be paid

Read: Commissioner v. Agiha, GR 187425, March 28, 2011

20. Can bank unilaterally increase interest rate on loan

21. Can parties agree on interest rate hike based on prevailing market rate

Read: Lotto Restaurant v. BPI Family, GR 177260, March 30, 2011

22. Unconscionable interest rate

Read: Villanueva v. CA, GR 163433, Aug. 22, 2011

23. Is writing off a loan equivalent to condonation

Read: Reyna v. COA, GR 167219, Feb. 8, 2011

II. The New Central Bank Act (RA 7653)

1) The Bangko Sentral ng Pilipinas

Read: Sec. 1, 3, NCBA

2) Basic functions of BSP

a. Bank supervision

Read: Busuego v. CA, 394 SCRA 473

b. Money function
c. Monetary policy

1. Basic tools of monetary policy

i.open market operations

ii. discount policy

iii. bank reserves

d. International monetary stabilization

e. Banker and financial adviser of government

Read: Sec. 113, 115, 117-119, NCBA

3) The BSP Governor; powers and duties (Sec. 17)

4) The Monetary Board

a. Powers of the MB

III. Other Related Laws

1) Philippine Deposit Insurance Corporation (RA 3591 as amended)

a. Deposit insurance

b. Primary functions of the PDIC

Read: PDIC c. Phil. Countryside Rural Bank, GR 176438, jan. 24, 2011

c. Insurer of deposits (Sec. 1, RA 3591)

d. Insured deposit (RA 9576)

e. Can maximum deposit be adjusted

f. How to determine amount due depositor

g. Deposits not covered by insurance

h. Splitting of deposits

i. When claim must be filed

j. PDIC as regulator

1. Examination
Read: PDIC v. Phil. Countryside Rural Bank, R 176438, Jan. 24, 2011

2. Investigation

Read: PDIC v. Phil. Countryside

k. PDIC as rehabilitation receiver of banks

Read: Sec. 10, RA 3591

2) Anti-Money Laundering Act (RA 9160 as amended by RA 9194 and RA 10365)

a. What is money laundering (RA 10365)

b. Covered transactions (RA 9194)

c. Suspicious transactions (RA 9194)

d. Covered entities (RA 10365)

1. Lawyer, accounts not covered

e. Unlawful activity (RA 10365)

f. Anti-Money Laundering Council

1. Functions

g. Prevention of money laundering

1. Customer identification

2. Record keeping

3. Reporting of covered and suspicious transactions

h. Freezing of monetary instrument of property

i. Authority of AMLC to inquire into and examine bank deposits (RA 10167)

1. When court order required, not required

Read: Republic v. Eugenio, GR 174629, Feb. 14, 2008

3) Secrecy of Bank Deposits (RA 1405)

a. Peso deposits; exceptions

b. Where the money deposited is the subjection of the action

 Read: BSB Group Inc v. Sally Go, GR 168644, Feb. 16, 2010

c. Foreign currency deposits; exceptions

Read: Sec. 8, Foreign Currency Deposits Act

Sec. 11, AMLA

Sec. 27, 28, Human Security Act

d. Secrecy of bank deposits under Anti-Money Laundering Act

e. Garnishment

1. Deposits exempt from garnishment

i.foreign currency deposits (Sec. 9, FCDA)

Read: Salvacion v. Central Bank (Aug. 21, 1997) – exception

ii. provision for family (Sec. 13, Rule 39, Rules of Civil Procedure)

4) Human Security Act of 2007 (RA 9372)

a. When examination and sequestration of deposits allowed

5) The Terrorism Financing and Prevention and Suppression Act (RA 10168)

a. Authority of ALMC to investigate, examine deposits and investments

b. Authority to freeze

6) Truth in Lending Act (RA 3765)

a. Disclosure requirement

Read: Heirs of Espiritu v. Landrito, GR 169618, April 4, 2007

Sec. 6c, TLA

7) Consumer Act of the Philippines (RA 7394)

a. Required disclosures on consumer loans

b. Exempt transactions

OTHER SPECIAL LAWS

I. Full Entry of Foreign Banks in the Philippines (RA 10641, amending RA 7721)

1) Modes of entry

2) Who are allowed to enter

3) Guidelines for approval

4) Capital requirements

5) Board of directors

6) Equal treatment

7) Change of mode of entry

II. Foreign Investments Act (RA 7042 as amended by RA 8179)

1) When does the FIA apply

Read: Sec. 2, FIA

2) Definition of Philippine National (as amended by RA 8179)

Read: Sec. 3

3) Definition of capital under Sec. 11, Art. 12, 1987 Constitution

Gamboa v. Teves, GR 176579, June 28, 2011

Heirs of Wilson Gamboa v. Teves, Oct. 9, 2012

In the Matter of the Corporate Rehabilitation of Bayan Telecom, GR 175418-20, Dec. 5, 2012

4) Foreign Investment Negative List

5) Registration of investments

6) Foreign investments in export enterprises

7) Foreign investments in domestic market enterprises

8) Investment rights of former natural-born Filipinos

9) Other rights of natural born citizens (Sec. 10)

10) Doing business in the Philippines

a. What constitutes doing business (Sec. 3d, FIA)

b. What the term “doing business” excludes (Sec. 3d)

c. Other exclusions under IRR, FIA

11) Registration of investments of non-Philippine nationals (Sec. 5)

12) Foreign investments in domestic enterprises (Sec. 7)

13) Non-compliance with FIA requirements on registration

a. Fines

b. Forfeiture of benefits

14) Appointment of resident agent

15) Effects of failure to secure SEC license

16) Determining Nationality

a. The Control Test

Read: Sec. 1b, IRR, RA 7042

b. Application of control test

c. The Grandfather Rule

Read: Narra Nickel Mining v. Redmont, GR 195580, January 28, 2015

17) The Foreign Investment Negative List

Read; Sec. 8, FIA

10th Regular FINL (2015)

III. The Anti-Dummy Law (CA 108 as amended by PD 715)

a. Purpose of the law

b. Nationalization of Filipinization law

Read: King v. Hernadez (1962)

Luzon Stevedoring v. Anti-Dummy Board (1972)

Sec. 2a, CA 108

c. What are nationalized activities
1. Completely nationalized activities

2. Partially nationalized activities

d. Participation of foreign investors in governing body of partially nationalized activities

e. Exceptions to the ban on alien employment